Mergers and Acquisitions in Automobile Industry

Mergers and takeovers are forms of external growth within a business. External growth occurs when one firm decides to expand by joining together with another. A takeover specifically refers to the gaining control of a firm by acquiring a controlling interest in its shares (51%). Merger, on the other hand, means the joining with another firm to form a new combined enterprise, shares in each firm are exchanged for shares in the other.

The goal of this consulting report is to analyze the strategy for General Motors. To start, a five forces analysis of the automobile industry was conducted. The five forces include the following factors: competition among rivals, threat of new entrants, supplier power, buyer power, threat of substitutes, and role of complements. Understanding the influence of each of these factors provides insight into the attractiveness of the automobile industry. Such an understanding is necessary for an effective critique of General Motors’ strategy for the future.

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.

Given the current economic climate, I think the automotive industry is going to be faced with a multitude of economic challenges in the next five years. As an oligopoly market, the auto industry is highly dependent on strategic decision-making, and the demand for dynamic innovation and supply at decreased-cost levels. Competition, possibilities of turning substitutes into compliments, and shifts toward higher demand in services are seemingly leading factors that face the current automotive industry in the immediate future. But first, we should not ignore the political forces at play within the market.

As a result of extensive research on various topics, the one area there has been on the rise and is subject to further debate and analysis is the North American free trade agreement. This particular treaty is of interest owing to the current globalization that is fast consuming economies across the world as well as the change in leadership in the three countries involved. As a result, this essay takes into account the current economic state of the world about the increased competition; need to form economic mergers and the role it plays. Therefore, the choice of this key term is as a result of curiosity of the effect of globalization on the formation of economic mergers.

Of these 212 firms, only 156 of these mergers had compustat data on acquirer’s past and future R&D intensity. R&D intensity is derived by dividing the R&D by the total revenues of the firm. After consolidating these 156 mergers we determined which mergers saw a positive change in R&D intensity. Of the 156, 102 mergers saw a positive change in R&D intensity. From this point on we will focus only on these positive changes in R&D intensity and look at how CARs relate to them. The main objective is to look at the sign of the CARs not the magnitude, meaning is the CAR negative or positive, not big or

there are three sorts of mergers: horizontal mergers, vertical mergers and combined. A horizontal merger is an amalgamation between two firms possibly dynamic in similar market at similar level of activity e.g. between two insurance firms whnventory networkile a vertical merger includes firms working at various levels of chain of supply e.g. an insurance firm obtaining a

What are the current M&A trends and potential outlook in automotive aftermarket categorized by horizontal vs vertical integration?

Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.

Merger refers to the combination of two or more companies into a single company where one continues to exist, while the other loses to its corporate existence. The survivor acquires all the assets as well as liabilities of the merger company.

There are distinctive barriers to entry in the automotive industry. The main 10 firms operating in the automotive industry have great power in terms of reputation, finances, experience, technology and existing large product portfolios. It would be highly difficult for a new company to compete with the above.
• The existing companies within the industry are joining forces, which at times do have detrimental effects for new comers to the market and for some existing companies. For instance, the situation of Rover in the UK. In the past, the profitable components of Rover were purchased by BMW and Ford, and Rover was left producing poor quality and old vehicles, which consequently led to its bankruptcy in April, 2005 (BBC, April

Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This

This work should serve as a good starting point for everyone interested in the topics such as market penetration, Romania’s automotive industry in a Central and Eastern European context. My research questions are the following what the advantages and disadvantages of the Equity Joint Venture (EJV) and Brownfield Acquisition are when entering a CEE automotive industry, and which major Multinational Enterprises (MNE) entered the Romanian automotive industry, in addition how the chosen market entry form influenced their success.

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

The nature of change being witnessed in the contemporary business environment has made mergers and acquisitions a common feature. In the context of mergers, some two or more companies engage in negotiations and start to operate as a single entity. On the other hand, in acquisitions, one large firm acquires a smaller company. While on paper, these two components, both mergers, and acquisitions, may appear straightforward; the gist of the issue is that there is significant complexity associated with both measures.