Professional Documents
Culture Documents
For Example:
Expansion of markets
Synergistic benefits
Technology Transfer
Legal Problems
For Example: when Sony Corporation acquired Columbia Pictures in 1989,
it had to face a lot of legal problems that stemmed from the recruitment of
senior management who were under contract at Time Warner
Accounting Issues
For Example: When HLL merged with BBIL, the two companies had to
harmonize their accounting as both the companies were following different
accounting policies and the internal controls also differed. While HLL used
US GAAP, BBIL prepared its accounts using Indian Accounting Standards
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Difficulties in Cross Border Acquisitions
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Difficulties in Cross Border Acquisitions
Technological differences
For Example: Columbia Pictures were in movie production, while Sonys
competencies were in movie and television business. While Sony was
innovative and believed in developing and using latest technology, Columbia
was a bit slow in this respect. Each wanted to stick to its core competencies and
technology causing integration problems.
Strategic Issues
For Example: Merger of British Petroleums (BP) and Mobils downstream
operations across Europe. The strategic logic has been size and market power
required to compete against the other major oil companies and even
supermarket chains with gas pumps in Europe. Significant cost savings can be
realized by eliminating duplicate facilities and employees, and by rationalizing
purchasing and cutting overhead.
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Difficulties in Cross Border Acquisitions
Failure to integrate
For Example: BP and Mobil merger was expected to generate market power
and cost savings through consolidation of their refining and marketing
operations in Europe. But the integration issues remained for the two
companies merged in Europe but remained rivals elsewhere.
HR Issues
For Example: The merger of Bridgestone and Firestone faced tremendous
HR issues. The employees of Firestone had a feeling of mistrust and stress,
perceived restrictions in career plans and attacks on established cultural
traditions. Firestone workers went on a strike when Bridgestone initiated
cost cutting measures to tackle the huge losses incurred. Had the feeling of
mistrust and stress been addressed, the strike could have been averted.
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Integrating Cross Border Acquisitions
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Thank - You
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