Mccaw Cellular Communications: the at&T/Mccaw Merger Negotiation

A merger offer would raise the stock prices of Massey-Ferguson, if the deal is perceived as synergic for the company in the long run, and would infuse financial resources and flexibility into the company in the short term. In the light of Massey-Ferguson’s negative performance, however, a merger offer from any company seems highly unlikely due to

Omnicare, Inc., (NYSE: OCR) and CVS Health Corporation (NYSE: CVS), are two competitive firms in different industries. A press release announces that “CVS Health and Omnicare sign a definitive agreement for CVS Health to acquire Omnicare” ("CVS Health and Omnicare Sign a Definitive Agreement for CVS Health to Acquire Omnicare," 2015). The purpose of this paper is to discuss the merger of CVS and Omnicare. First, the paper describes the principal firms in the merger and the industry in which each operates. Secondly, the paper discusses the incentives to consolidate from the viewpoints of each firm. Thirdly, the writer explains the competitive environment in the industry and how it benefits the firms and society.

When determining which company has the most to offer it is necessary to look at each set of numbers from several different views. For instance this paper will cover vertical and horizontal analysis, profitability, solvency, and liquidity ratios. I will be explaining how each set of results play into the decision making of which company would be best to invest in, by comparing both companies numbers in able to collect the necessary data to make a calculated decision.

AT&T recently acquired DirecTV after the latter’s shareholders voted to endorse the acquisition or merger. The acquisition was first endorsed by the boards of these companies in May 2014 before being subjected to a review by anti-trust regulators in the Department of Justice and Federal Communications Commission (England-Nelson, 2014). The approval of the acquisition would result in the merger of the country’s largest wireless carrier with the biggest satellite TV provider in the country. The merger between these two firms is geared towards creation of a leading content provider across various platforms i.e. video, mobile, and broadband services. However, the acquisition was influenced by various factors and is associated with several significant effects in light of the organizational structure.

This article written by Leslie Picker and Cecilia Kang primarily focuses on the issue regarding the merger of cellular phone giant AT&T with the entertainment conglomerate Time Warner. In late October the New York Times broke the news of these two joining and many industry annalists viewed the merger with skepticism as well as, outraged consumer groups. Individuals believed that AT&T and Time Warner would terminate any competition and create unfair pricing in order to encourage more mass media consolidation resulting in a market that would be strikingly similar to a pure monopoly.

Through the cumulative abnormal returns (CARs) that a company receives from the merger, we were able to see the effects of second requests and complaints on the company’s stock price over time. This methodology of using event studies to gauge the effects of mergers and the antitrust agency involvement was first applied by Eckbo (1983), and most recently by Filson, Olfati, and Radoniqi (2015). The event studies used in both of these journals and the others mentioned within the review of literature give us a good understanding of how accurate event studies are for predicting the effects that second requests or complaints given out by antitrust agencies can have on merging firms and within their

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

In last 10 years there has been a major emergence of a company called XM / Sirius Satellite radio. When fellow competitors XM Radio and Sirius Satellite Radio announced plans for a merger in 2007, most thought that an answer from the FCC would be coming the usual window of six months, allowing for a smooth transition of these two companies. Ignoring a self-imposed rule to handle such cases in 6 months of less, FCC Chairman Kevin Martin chairman withheld the verdict for approximately 17 months as his FCC debated the antitrust issues between Sirius and XM. Briefs were submitted by the Justice Department, individual citizens, and traditional radio broadcasters, arguing that the XM-Sirius merger should have been prevented over antitrust concerns. Ultimately, the Justice Department, and then the FCC, on a 3-2 vote, approved the merger in 2008. This paper seeks to discuss merger and antitrust positions concerning Sirius XM by starting with a history of each individual company, explaining the relevant business law topics and opponents’/proponents’ arguments, and highlighting the post-merger financial success of the combined company.

Our case study titled, The AT&T and McCaw merger negotiation, provides us with an opportunity to negotiate the terms of the merger between McCaw cellular and AT&T. McCaw was the largest competitor in the rapidly growing cellular telephone communications industry. AT&T was the dominant competitor in long-distance telephone communications in the United States, and one of the largest corporations. Prior to the negotiations, it had no position in cellular communications.

I. BACKGROUND: CelluComm and GMCT and the Industry AT&T’s Bell Laboratories cellular telephone networking innovation had enabled several cellular network operators to get licenses from the FCC to operate in separate license territories right about the same time AT&T was broken up in early 1980s. These operators were either companies like Cellular Communication Services, Inc. (CelluComm) or small entrepreneurs who had won license territories through the lottery system. CelluComm’s  president  and  founder  Ric  Jenkins  was  known  for  being  an  aggressive businessman  who  had  extended  it  to  a  200  million  dollar  enterprise  ranking  in  the  top  20  of  the industry.  Key  to

In order to correct for the varied sizes of the companies, we calculated the five-year Compound Annual Growth Rate (CAGR) for each, and the percentage change for each company’s stock price from 2005 to 2009. The

The AT&T and T-Mobile merger should not be approved, as the merger may cause more harm than benefits to consumers and for the related market. A horizontal practice is one that involves mergers and activities in the same industry. A horizontal merger comes under Section 7 of Clayton Act and under Section 2 of Sherman Act, as it would create a monopoly. As AT&T and T-Mobile both operates in same industry, the merger is clearly horizontal. The concern with horizontal arrangements is that it may increase market power, leading to lessened competition and higher prices. Many of interest groups(like other companies like SprintNextel, the Competitive Carriers Association, Cellular South, Leap Wireless, MetroPCS, Computer and Communications Industry Association, Yankee Group, group of seven NGOs including Consumer unions , National Hispanic Media Coalition, Future of Music Coalition, etc.) opposed. Most of them expressed concerns that the merger will stifle the competition, may result in increased prices for consumers, will reduce innovation and technological progress in the field, and it will leave with fewer options for consumers to shop around for cell phone plans. The decrease in consumer choice happens as the merger will reduce the number of mobile wireless carrier who has decent nationwide coverage. Consumers Union stated that there is great deal of data and evidence that this transaction will lead

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).

3. What risks do AT&T and McCaw face in this proposed merger? Consider a range of transactional, financial and operating risks. What effect do these risk factors have on the value of McCaw?

This case study is a 2003 M&A deal simulation that occurs between Blackstone and Celanese. This is case presents the concerns of the Celanese and its side of the view of the deal.