The strategies behind mergers and acquisitions can vary. A company considering buying another company should analyze the reason for the acquisition. Management's business strategy must be aligned with the acquisition. There must be real advantages to acquiring another company. These advantages can include gaining new technologies or products, adding size or volume, or even eliminating competitors. I will examine the strategy behind three recent acquisitions and the financial outcomes of these acquisitions.
On November 18, 2005, SBC closed its acquisition of AT&T for $16.9 billion. The strategy behind this acquisition came down to scale and scope. As Edward Whitacre, CEO of the new at&t puts it, "It's still about scale and scope," and "it's about owning the assets that connect the customers" (O'Connell, November 7, 2005). The competitive market has forced consolidations of many in the telecommunications industry. The Internet and wireless has spawned a whole new player in the......
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Approximate Word Count: 837
Approximate Pages: 4 (260 words per double-spaced page) |