The Sony Ericsson Merge

The Sony Ericsson Merge

What are merges and why do they happen?

A merge is when two companies become one and combine clients, assets,

and debts. There are several different types of merges including

horizontal, vertical, backward vertical and lateral merges. 3. A

horizontal merger is one where two businesses in exactly the same line

of business or stage of production merge with on another, for example

if two hairdressers joined together. A forward vertical merger is

where a business merges with a business at the next stage of the

production process, for example a business making furniture may merge

with the retail outlet selling the furniture. Backward vertical merger

is where a business merges with a business at the previous stage of

the production process, for example the business making the furniture

may merge with the business that supplies the wood and parts for the

furniture. A lateral merger is where a business merges with a business

who makes similar goods to it but who are not in competition with each

other, for example if a chocolate bar manufacturer merged with a

luxury chocolate manufacturer. Corporate mergers occur when two

companies combine. In some cases both companies want to merge. This is

called an agreed merger. Another situation is where one company seeks

to control another without its agreement. This is called a hostile

takeover. To avoid a hostile takeover the target company may seek a

'white knight', another company with which it would prefer to merge.

It is up to the shareholders of the target company to approve a

merger. They will usually do so if the board recommends it, or if they

stand to make a subst...

... middle of paper ...

...peak. For Sony Ericsson to get

a major market share they will need to be conscious of other merges

that could potentially happen between other brands, an example could

be between Siemens and Samsung, with Siemens needing to gain market

share, and Samsung needing to regain their own, it could be very

profitable for both companies.

Bibliography

1. Key Notes – www.keynotes.com, retrieved the statistics shown in my

report from this website. This web site had numerous descriptions of

markets throughout the world including the mobile phone handsets.

2.BBC – www.bbc.co.uk, this website helped me retrieve the information

required information on merges that I needed to help me with my

report.

3. Revision Guru – www.revisionguru.co.uk, I received my information

on the different types of merges from this website.