Bombardier Adtranz

DB could lower their short-term borrowing by lowering their dividend. This will not make the board of directors happy, since it has been mentioned that for some of their family members, this is their source of income. But lowering the dividend can be offset against

Company does not have big amount of debt to pay. In 1994 its outstanding debt is only 36.4% of its total assets which is a healthy rate. Its current assets are higher 2.4 times than its current liability. Also company has no outstanding interest to pay. Price earning ratio of 42.80 is highest among the competitors. (Pls. see exhibit 2, 3&4) for details. So we can safely conclude that BBBY has great potential to sustain.

Bombardier has grown substantially via acquisitions since 1989. These acquisitions allowed Bombardier to expand operations, however, in doing so they inherited multiple different information systems, processes and business practices. Bombardier, had become a textbook silo company.

They faced challenges from acquiring many companies because during the acquisitions Bombardier inherited the data, processes and systems of each company which created inefficiencies. Systems didn’t communicate with each other resulting in low inventory turns and price inconsistency. This was not productive for Bombardier and was time consuming for the employees. The biggest problem was the low visibility of inventory and the lack of communication between systems. Bombardier had now a global presence but was not organized to maintain growth without changing the vision and processes. Another challenge is resistance to change, this factor can have a huge impact on the new vision and

(1) Synergy creation: The businesses of both companies are famous and highly complementary to each other.

For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.

• World wide learning- Adtranz would gain the managerial and corporate structure of Bombardier Transportation, which could ensure the stability of Adtranz in Bombardier Transportation.

What accounts for GBBC’s success? What near and intermediate term risks, if any, do you foresee?

Stable cash flows with estimated total revenues increasing from 559.9 million in 1978 to 937.8 million in 1984 (Note also its strong intellectual property as shown by its

BBBY is special since they are selling products that are produced by name brand companies, and if any products needing repair could be sent directly back to the name brand company. Therefore, there are no switching costs for BBBY since they have no control on the quality of the products they sell. However, there fixed operating costs have been high and if management adds fixed operating costs to their business operations, without an increase in sales, the firm’s profit would decline and result in a loss, which is an indication of relatively high business risk.

With this acquisition, Timken could break into and dominate the European market and use it as the leverage to be the leader in bearing industry.

This represents a 7% increase in stock price. Further, the additional leverage and return of excess cash to shareholders will significantly increase ROE. If the market determines that an 80% debt capital structure is feasible for BBBY, then we will expect further capital gains as investors applaud shareholder friendly policies and re-examine EPS estimates. However, if top line growth and same store sales growth continue to trend downward, investors may become skeptical of BBBY management’s ability to continue generating over 30% EPS growth, and thus question the ability of the company to service its debt in the future.

An analysis of a repurchase of stock for $400 million cash, and recapitalization to 80% debt-to-total capital by borrowing $1.27 million reveals that BBBYs return on equity will be 113%, return on assets 61% and an after tax cost of debt of 28%. ROE is > ROA and ROA > after tax cost of debt. With the 80% debt-to-total capital structure ROE exceeds the other two capital structure scenarios of no debt and 40% debt-to-total capital. While all of this looks great there are other considerations. The household and personal products industries debt to total asset ratio is 34.69% while BBBY debt to total asset ratio is at 44% ($1,270,000/$2,865,023). Increasing to this capital structure would also reduce shareholders earnings per share.

Overview Bombardier Aerospace is a division of Bombardier Inc. and the third largest global airplane manufacturer after Boeing and Airbus. Its headquarters are in Quebec, Canada, and with 33,600 employees is poised to become a major player in helping the developing world acquire aircraft. The C-Series is a family of narrow-body, twin-engine, medium range jet liners which, despite some challenges in orders, remains a committed product line. It is designed for the 100-150 seat market, which is about 20,000 aircraft globally and represents about $250 billion in revenue over the next few decades. One interesting fact about the C-Series is that it is truly global in components and supply, sourcing from manufacturers in China, Italy, The Netherlands, France, the United States, and Great Britain (Change is in the Air, 2012).

According to previous research, BGs are very different from other types of firms. Some of their most important performance issues are that they face higher operational and financial risks of internationalization as well as that they need to enter in key local markets, having limited resources and little prior experience.