Study on Technology Industry’s Mergers
Jianyun Wang
1.Introduction
Dell has announced to buy data storage giant technology company EMC by paying $67 billion in Oct 12th 2015, which is the largest merger deal in the technology industry in recent years. This two giant technology companies’ combination not only gives a big shock to the whole industry, but also leads the merger wave in the technology industry to a new peak. Merger has been one of the most popular and direct strategies for most of the company to develop their business, especially in the technology industry. In 2015, the tech merger deals value reached $450 billion (data from Bloomberg, Dec 23rd).
2.The incentives to merge for the technology company
Technology-based companies always
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Nowadays, technology has developed in a remarkable speed and there are always new technologies or new tech products produced every day. Therefore, many technologies are eliminated from the market and replaced by new technology in a short time. To survive in the technology market, it is better for the companies to choose merger to improve their products or technologies due to they have enough capital to develop their business. What’s more, it is always not easy to transfer a new technology to a real product that can be sold. So if the technology cannot be applied in the real life, then this technology is useless and has no economic value, and there will be no investors want to invest the company and the cost cannot be recovered. Hence, to reduce the risk, some large companies want to buy the companies which are small but having unique technology, or in the contrast, some small business wants to find a proper buyer so that their business can survive in the market at …show more content…
After two companies merging, they will become one company but has two companies’ resources and lager customer basis. Therefore, the new combined company has the ability to expand the market share and improve its market power. Before Lenovo buy the PC department of IBM, the Lenovo is just the ninth largest PC provider worldwide which just takes 2% of the worldwide PC market share(First three quarters of 2004 PC market share worldwide, based on shipment units according to Gartner). After 2004 when the merger deal closed, the Lenovo has increased to be the third largest PC company worldwide which took 6.8% of the worldwide market share (2005 PC market share worldwide data from Gartner). Now the Lenovo has become the largest PC manufacturer which occupies almost 21.4% of the market share worldwide (IDC worldwide quarterly PC tracker, Jan 12,
In the year of 2005, the companies eventually found a way to make it easier for the companies to combine without having any major issues or problems. Unfortunately, around the year of 20010 the merging com...
In this analysis includes a summary of the characters and the issues they are dealing with, as well as concepts that are seen that we have discussed in class. Such as stereotyping and the lack of discrimination and prejudice, then finally I suggest a few actions that can be taken to help solve the issues at hand, allowing the involved parties to explain their positions and give them a few immersion opportunities to experience their individual cultures.
The Lester Electronics Scenario has potential for several issues and opportunities. The first issue is that Shang-Wa has been approached with a hostile takeover bid. TEC showed its interest in acquiring Shang-Wa to expand their global growth opportunities. Shang-Wa knows that due to the size of the TEC as a company, this could turn in to a hostile takeover is they do not cooperate. As part of their defensive technique, Shang-Wa has approached Lester Electronics with the idea that a partnership would benefit both companies. Lester Electronics has done the research and found that a merger would be more beneficial to the company. This could cause some possible problems with Shang-Wa because their proposal was for a partnership, not a merger. John Lin, Shang-Wa's CEO may not be ready to give up his company just yet, even though he has been thinking of retiring soon. As part of a merge with an internationally based company, Lester Electronics will also have to do the research to find out how to best deal with operational exposures, such as exchange rate fluctuations.
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
The type of merger between Electronic Data System (EDS) and AT Kearney is called Forward vertical merger. Forward vertical merger is when two or more companies combines together in the same industry but different field or when two companies producing goods and services for a product. Electronic data system, the US information technology group, brought AT Kearney, the global strategy consultancy firm in a deal worth $96m. Electronic data system was firm involving producing information technology equipment’s bought AT Kearney an IT consultancy firm.
According to Investopedia.com (2014), “[…] a merger is a deal to unite two existing companies into one new company […]”. There are 5 main types of merger: conglomerate, horizontal, market extension, product extension, and vertical. In a conglomerate merger, none of the companies to be united has anything in common. In a horizontal merger, the companies to be merged are in same industry, and the deal is part of a consolidation. In a market extension merger, the companies sell same products but compete in different markets. In a product extension merger, companies add together products that go well together. In a vertical merger, the companies make parts for a finished good combine. Among the mergers that I researched, the one that caught my eye the
I agree with you, operating in a highly regulated industry, the healthcare organizations need to consider several factors when it comes to forming an alliance or entering into a merger deal with other healthcare provider. As you mentioned, healthcare practice (patient care) is the one of the most important factor to consider because the ultimate goal of any healthcare organization is the quality patient care, so when organizations decide to merge the must consider how their new operation will contribute to patient care. You have provided very good reasons for the necessity of healthcare mergers. Merger can help organization cut the costs and share technology which can lead to improved patient
As the business, people put it, to maximize the wealth of shareholders (Peavler, 2016). This could be done by pursuing more of an immediate reason that will realize the shareholders wealth maximization goal. However, this main reason may fail to be realized as most mergers depict negative results.
The last thing that I read is that the merger is expected to generate $500 million in annualized costs. Two big-name companies, have decided to join forces on the mobile front in hopes of gaining a small piece of the mobile market. Lots of investors are hoping that this merger will give the big guy a little competition and their competition is Apple. Once considered powerhouses in other markets. Fujitsu and Toshiba are getting ready to join forces.
In recent years, the price of research and development has skyrocketed, making it very difficult and expensive to introduce new drugs into the market. Companies are spending more than ever from their profit of sales revenues into research and development. Now looking at it from this point of view, a newly merged company will have such high profit and revenue that they will have the opportunity to spend as much as they want on research and development, without money being an issue or a concern. Technology is improving by the day, and with the merging of companies-these companies will join technologies and join their research making their progress advance exponentially. Our company- Verduga Inc.-has wasted a lot of money recently on research and development. If we were to merge with Coronado-Salinas Inc., we would see a vast increase in the amount of capital available to us to use in research and development. The downside is that research and development sometimes turns out to be just research. Big companies can get overconfident and after getting a couple of results they might get too compulsive and overspend in research and development.
Over the last few years, the pressures emanating from international competition, financial innovation, economic growth and expansion, heightened political and economic integration, and technological change have all contributed to the increased pace of mergers and acquisitions.
In 2010, because of its innovation strategy and acquisitions, Lenovo became one of the world’s largest PC producers by having achieved a considerable market share (Lenovo 2013b).
The use of computers in school classrooms has evolved throughout the years, and has become revolutionary in changing the way we teach and learn. Our classrooms should no longer be confined to four walls and a few teachers who are considered to be experts in knowledge. Our classrooms need to keep up with a changing society and a new world that is dependent on technology. As students graduate, they need the technological skills needed to thrive in a world in which technology sets the pace. Society expects the school system to produce functional citizens who have the skills to gain profitable employment, and not be a drain on the system.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.