And use competencies to improve operations goal is to

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and use competencies to improve operations Goal is to sell company back to market through an IPO Split up the pieces of a company Rationale is that the pieces of a company would be worth more separately than in a combined entity Create synergies with existing businesses of the buyer
Restructuring and Outcomes 31 Downsizing Downscoping Leveraged Buyout Reduced labor costs Reduced debt costs Alternatives Short-Term Outcomes Long-Term Outcomes Emphasis on strategic controls High Debt costs Loss of human capital Lower performance Higher performance Higher risk
MNE Growth Strategy: Build/Buy/Ally Framework Shared Equity, New Entity Multi-year Purchase Agreement (ALLY) Multi-year Distribution Agreement (ALLY) Licensing (ALLY) Cross Licensing (ALLY) Joint Marketing or Manufacturing (ALLY) Joint R&D (ALLY) Joint Venture (ALLY) M&A (BUY) Greenfield Investment (BUY) Resource Commitment C o n t r o l
Cisco Systems Decision Criteria Risk Level Speed of Expansion Required Resource Availability Similarity Change in the Environment Make Low Slow High The Same Slow Internal Growth Buy Low to Moderate Moderate High to Moderate High Similarity Moderate M&A Ally High to Moderate Fast Moderate to Low Different Extensive Alliance Then If These Conditions
Top 8 Technology Acquirers (2007-2012) 34 Company Google IBM Oracle Cisco MSFT Vmware Dell HP # Deals 88 64 50 40 48 14 22 28 Source: Wikipedia
M&A Waves 35 Wave Time Period Types of M&A First Wave 1893-1904 Horizontal mergers & acquisitions Second Wave 1919-1929 Vertical mergers & acquisitions Third Wave 1955-1970 Diversification; birth of conglomerates Fourth Wave 1974-1989 Hostile takeovers, corporate raiders, leveraged buyouts Fifth Wave 1993-2000 Mega deals caused by globalization and deregulation Sixth Wave 2003-2008 Mega deals, private equity, shareholder activism Seventh Wave 2011-? Mega deals in healthcare, technology, consumer goods, etc. Source: KPMG, “The Seventh Wave of M&A”, , May 31, 2011 M&A activity seems to come in waves (six waves since 1800’s)

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