Chapter 11 outline

Chapter 11 outline - Chapter 11 Alliances Acquisitions...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 11 – Alliances & Acquisitions Defining Alliances and Acquisitions Strategic alliances – voluntary agreements between firms involving exchange, sharing, or co-developing of products, technologies, or services Contractual (non-equity-based) alliances – association between firms that is based on contracts and don’t involve the sharing of ownership Co-marketing, R&D, contracts, turnkey projects, strategic suppliers and distributors Equity-based alliances – association between firms that is based on shared ownership or financial interest Strategic investment – one partner invests in another Cross-shareholding – each partner invests in each other Acquisition – transfer of the control of operations and management from the target firm to the acquirer. Target becomes a unit of Acquirer Merger – combination of operations and management of two firms to establish a new legal entity Only 3% of Mergers & Acquisitions are mergers Institutions, Resources, Alliances, and Acquisitions Institutions The impact of formal institutions on alliances and acquisitions can be found along 2 dimensions: Antitrust concerns o It’s suspicious when two competitors decide to merge o Antitrust authorities are more likely to approve alliances as opposed to acquisitions Entry mode requirements o In many countries, governments discourage/ban acquisitions to establish wholly owned subsidiaries (WOSs) The only choice for FDI is alliance with a local firm o Two trends in entry mode requirements: More liberal policies
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 3

Chapter 11 outline - Chapter 11 Alliances Acquisitions...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online