Case Study: Daimlerchrysler's Merger

Our case study deals with Mass Merger. Since the 90s, together with the globalization of business, Mergers and Acquisitions have developed at an incredible pace. Thus, companies from all over the world can be lead to work together as one single corporation. Moreover, the world has become interdependent not only economically, but also culturally, that is to say one culture may influence another one or different cultures can be mixed. It is then obvious that intercultural issues have to be solved.

There are certain benefits that derived from the merger, which would also boost the operations and financial performance of the organization.

5. Merger/Final Agreement. This Agreement merges all prior agreements and understandings of the parties. This is the final Agreement of the parties and this Agreement contains all of the duties, obligations and rights of the parties. Any term or condition omitted from this Agreement (and which is not part of any schedule), is not intended to be a part of this Agreement. No oral agreements have been made except as set forth

Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.

Pikula (1999) observes that in merging two or more entities, the management of the companies must adhere to the Sherman Anti-trust Act which was established in 1890. This act was specifically established to prevent mergers from creating monopolies and cartels with an aim to exploit the consumers through determining prevailing market prices. If the merger results in a monopoly, it won’t be approved by the government. Employee contractual agreements must be considered before, during and after mergers. For the merger to go on seamlessly there should be shareholder approval. Initial approval by shareholders for the companies to consolidate their operations helps prevent conflicts from shareholders after the merger. Lastly, regulatory approval should be considered. The management must register the newly formed company. In addition, managers from the merging parties must consider agreements and contracts that the parties are engaging in as these will be transferred to the new company upon the merger.

It is believed that at the root of any business strategic merger is to expand. This expansion could be in the form of a larger operations leveraging resources, enhanced opportunities or too simply unite with another business to reduce expenses. Ford and Volvo explored the option of teaming up in hop of lowering manufacturing cost.

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

2) Branding/Marketing- The merger of two entities in essence means that each individual organization needs to shed its individuality and adopt a common goal. Hence, the branding and marketing should echo the group’s identity and be integrated across divisions.

I do realize that the merger of two or more companies does not come in a nice clean package. However, Grobman does a nice job reviewing how to begin a merger and the steps necessary for a merger. He reviews that each participating board should adopt a resolution in favor of the general principle of merging, should appoint a merger committee of board members and staff, use a outside experienced merger consultant, and have meetings scheduled to discuss goals of the merger, whether it is feasible, budgeting, laws, polices, and staff (Grobman, 2015, pg. 395). I think having a careful plan and address these areas Grobman discusses can lead to a successful merger.

In 1954, Alpha Plastics was founded near Manchester. And by the mid 1969’s, the company had developed into a medium-sized company with around 6,000 employees. The company was famous for developing and manufacturing a wide range of laminates and industrial adhesives. Also, it had explored the market in synthetic fibre manufacture by take-over. In 1988, Alpha Plastics involved in merger with the Colmar Chemical Company, which is a slightly larger organisation with 8,500 employees and located near Stockport. Colmar produces a variety of industrial chemicals besides plastic and specialises in the production of synthetic fibres. Alpha Plastics believed that the merger would allow taking advantage of

Chapter 7: Merger and Acquisition Strategy --- The Acquisition and Restructuring of Kia Motors by Hyundai Motors (written by Seungwha Chung and Sunju Park)

The United States Automotive industry has been dominated by five major auto manufacturers: GM, Toyota, Ford, Chrysler, and Honda. As globalization increases the domestic automotive market (GM, Ford, Chrysler) suffers from foreign competitors. Although with high entrance barriers the market suffers little to none from new entries. There are several reasons for this the largest being capital. It takes a lot of capital to obtain manufacturing plants, raw materials, as well as to hire and train employees. PASTEL Analysis

As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.

The General Electric (GE) and Honeywell International (HI) case illustrates the complexities of structuring mergers and acquisitions when the combined firms are capable of exerting market influence that threatens the competitive landscape. While General Electric's CEO, Jack Welch, characterized the deal as, "This is the cleanest deal you'll ever see," European anti-trust regulators were not so inclined to view the transaction as harmless to competition (Elliot, 2001).

As it relates to the competitive structure, or the number and size distribution of companies within an industry, the automobile industry is considered a consolidated industry, where a small number of large companies dominate and are able to set prices. Traditionally, in America, these companies were called “The Big Three,” Chrysler, Ford, and GM, but Toyota, was also a major rival during the recession. “In consolidated industries, companies are interdependent, because one company’s competitive actions or moves (with regard to price, quality, and so on) directly affect the market share of its rivals, and thus their profitability” (Hill & Jones, 2012, p. 62). The relative power of consolidation on the automobile industry was high.