Corporate merger between Volkswagen and Porsche

Corporate merger between Volkswagen and Porsche Introduction There are different ways in which a company can stimulate growth either internally or internally. External growth as defined by Block, Hirst and Danielson is the growth of firms through amalgamation, mergers or takeovers/acquisitions. The authors define a merger as being ‘the agreed amalgamation between two firms.’ There are different types of mergers namely vertical, horizontal and conglomerate merger (Block et al, 2008).Advertising We will write a custom essay sample on Corporate merger between Volkswagen and Porsche specifically for you for only $16.05 $11/page Learn More History of the relationships of the two companies leading up to the final merger in 2009 Volkswagen and Porsche are two firms that are well recognized and established in the automotive industry. Based in Germany, both companies were founded by Ferdinand Porsche in the 1930s and have remained in the Porsche and Piech families to date. There has been contention an d rivalry, some fuelled by family differences between the two firms; in 2005, Porsche, the smaller of the two companies, began a takeover bid that included buying Volkswagen stock. This plan might have worked had Porsche not fallen into financial constraint (Anon, 2009). Volkswagen had to step in with a merger proposal which Porsche fought off fiercely but finally had to give in to because it would mean an infusion of much needed cash into the latter firm’s fried up coffers. The merger between the two companies, which hit a couple of snags, was finally ironed out in late 2009 (Kingsbury Dauer, 2009). A brief description of the firms Volkswagen and Porsche and the automobile industry The automotive industry is feeling the pinch of the global economic recession. The two auto makers are not the only companies to go the way of the merger. There are other acquisitions that have taken place recently and by all appearances it looks like there are many more on the way. Fiat, the Ita lian car making firm, has plans to acquire Chrysler as well as Europe’s branch of General Motors. VW is the biggest carmaker in Europe having annual sales in the excess of US $151 billion and selling up to 6.7 million units a year. Porsche has lower revenue of US $9.3 billion selling about one hundred thousand units annually (Kingsbury Dauer, 2009). Porsche and Volkswagen have a long history that goes way before the issue of a merger arose. Ferdinand Piech and Wolfgang Porsche, the respective chairpersons of the two firms, are the grandchildren of Ferdinand Porsche who foundered both companies in the 1930s.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Members of the Porsche and Piech families own between them 50% of Porsche Automobil SE stock. The two firms have even collaborated in the past to put on the market vehicles such as the Porsche Cayene SUV and the Touareg wh ose parts are manufactured in the same plant (Anon, 2009). Competition within the automobile industry The automobile industry is very competitive, more so in the face of the global financial crisis that has shaken even the strongest of giants. The top ten brands on the global market are Toyota, General Motors, Volkswagen, Hyundai, Ford Motor, Company, Peugeot, Honda, Suzuki and Renault. In the biting recession, the motor industry has been hard hit with major companies such as GM and Chrysler seeking bankruptcy protection from their governments or opting for mergers. The units of sales have declined sharply and profit margins have narrowed. Being in the automobile industry is simply not as lucrative as it was before the recession (carazoo.com, 2009). Why the Volkswagen-Porsche merger is a vertical merger There are three different types of mergers namely horizontal, vertical and conglomerate mergers. A conglomerate merger is one between two firms that are in two totally unrelated fiel ds of business while a vertical merger is one that takes place between two firms in a related business but with one being the buyer and the other the seller. A vertical merger takes place between two firms in the same line of business and who are competitors of each other (Block et al, 2008). Thus, the merger between Porsche and VW is a vertical merger because both firms are in the automotive industry. Why the Volkswagen-Porsche merger is a ‘friendly’ acquisition and the concerns regarding the acquisition The merger between VW and Porsche can be termed as a friendly merger because the terms of the merger have been negotiated by directors of the two firms until they have worked out an agreement which both parties find satisfactory. There was a three and a half year tag of war between Volkswagen and Porsche before the two companies finally hammered out a deal that was satisfactory to both. Porsche initially wanted total acquisition of VW, going as far as buying up 75% of VW stock, but had to settle for a merger (Boston, 2009). What VW plans to do is to take the brand names, along with other brands already under VW, and consolidate them into a holding company which Porsche terms as being an ‘integrated leading company’ (Boston, 2009). Synergy gains, portfolio effects, taxes, risk and the Volkswagen-Porsche mergerAdvertising We will write a custom essay sample on Corporate merger between Volkswagen and Porsche specifically for you for only $16.05 $11/page Learn More Firms create mergers for a varied number of reasons; these can either be financial or non-financial (Block et al, 2008). The reasons behind the merger between Volkswagen and Porsche fall into both of these categories. One of the motives that can drive firms to form mergers is on a bid cost savings; this is to the cut down on the cost of growth as compared to gearing internal growth. Taking over from a destabilized firm is more cost effective than tryi ng to generate growth using the resources that are already at the firm’s disposal. Acquisition means that the resources that were available to the acquired firm are now at the disposal of the firm conducting the acquisition (Block et al, 2008). A non-financial reason for carrying out a merger is for its managerial rewards. A firm may have the aspiration to expand its management and marketing capabilities while at the same time acquire new products to add to its brand. While this can be done through internal growth, it would be more expensive and take a greater deal of innovativeness and the dedication of a more company resources. Through acquisition, the firm can achieve all of the above in a way that is actually beneficial to itself. Those on the management team of the acquiring firm might be presented with the opportunity to get lucrative management positions that result from the merger (Block et al, 2008). For a firm like Volkswagen, there is also power play involved. Pors che and VW have been waging a power struggle for years now, with either company trying to outdo the other. Porsche incurred a debt of US $2 billion while covertly buying VW stock in a secret takeover bid. The thrill and prestige of whoever was to get the last laugh has shaped the way the two firms are going about their merger with VW seemingly turning the tables on Porsche at the last moment (Anon, 2009). The former CEO of Porsche, Wendelin Wiedeking saw the merger between the two firms as a way of making them into a single holding so that there would be created an economy of scale. Wiedeking’s reasoning was that if Porsche became a part of the VW group, then the former would not face the stiff penalties governing carbon emissions by automobiles that have been put in place in Europe since VW has automobiles that are considered fuel efficient and low-emission. Porsche’s automobiles would then segue in with the VW ones without attracting too much attention (Boston, 2009) .Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More But why would the stockholders be willing for a merger to take place? Stockholders can be motivated to back a merger because for them it means that if the merger transaction is to be conducted in shares, then they will have the chance to acquire stock in the new company (Block et al, 2008). Stockholders can also get a chance to branch out into new and varied investments if the merger transaction is performed in cash. Taking the example of VW and Porsche, stockholders in the VW firm will be presented with the opportunity to acquire Porsche shares and stock. Mergers can be good for shareholders because it will mean more value on the shares. Mergers have the potential of raising the earnings per share because of greater confidence of their value on the stock market (Block et al, 2008). When a large firm acquires a smaller one, the acquiring firm can make a quick profit by asset stripping. For the acquiring firm, a profit can be made by selling off assets brought in by the acquired busi ness (Block et al, 2008). A firm can be financially inclined to form a merger because of the resulting ‘portfolio effect’. This results when a firm can reap the benefits of economies of scale, cutting down on production costs as output increases on fewer resources, having a more extensive market reach and a broader market segment, as well as building up its tying and bundling techniques (Block et al, 2008). A merger can also make a firm more attractive to investment bankers who show an interest in financing projects that the firm might run in the future. Mergers may make a firm appear more financially sound and make it more viable to lending institutions. This is probably, another portfolio effect, because of the diversification of risk, without compromising the firm’s rate of returns (Block et al, 2008). Another non-financial reason for conducting mergers is to create synergy so as to cut down on production costs while at the same time increasing output. It is m ore profitable to apply a larger production unit to achieve a given task as compared to having smaller units performing the same tasks independently (Block et al, 2008). Conclusion As has been illustrated above, mergers can be beneficial to the acquiring firm because it creates room for growth. Mergers also have a portfolio effect in that the acquiring firms can access a larger market segment, spread their risk, capitalize on synergy and add to the value of their stock. The merger between Volkswagen and Porsche has taken nearly three years to work out. In the end, it will be beneficial to both firms since, being powerhouses on their own, their combined name will be an even more marketable brand. Again, Volkswagen can infuse the cash needed into Porsche to get the ailing firm out of its financial doldrums. Despite the initial hefty taxation costs that Volkswagen will have to pay in its acquisition of Porsche and the added risk of possible suits from hedge funds, the acquisition of Po rsche can be considered a feather in VW’s cap. Bibliography Anon. (2009, July 20). The World from Berlin: New Hurdles for VW-Porsche Merger. Spiegel Online International. Web. Block, S., Hirt, G., Danielsen, B. (2008). Foundations of Financial Management (13th ed.). New York: McGraw HIll. Boston, W. (2009, May 7). Porsche and VW Agree to a Merger. Time Magazine. Web. carazoo.com. (2009, October 7). Top 10 Car Makers of the World of 2009, Page 2 of 2 Associated Content associatedcontent.com. Automotive. Kingsbury, K., Dauer, U. (2009, August 14). VW Seals Deal for Porsche in Reversal of Fortune. WSJ.com. Wall Street Journal. New York. Web.

Georges Bizet's Carmen Essay Example | Topics and Well Written Essays - 750 words

Georges Bizet's Carmen - Essay Example The other player in this ill-fated triangle is a celebrity matador named Escamillo, for whom Carmen discards the ruined Don Jos. The opera reaches its climax outside the arena where Escamillo is to challenge a bull. There, Don Jos confronts Carmen, begging for her to return to him, but she cruelly refuses. In his misery and loss, Don Jos stabs her to death. The opera ends as Escamillo, victorious from the ring, discovers the lifeless body of Carmen with a bloodied Don Jos sobbing over her. Several years ago, I attended a production of Carmen and, though it was sung in English, I had a great deal of difficulty following the story. In addition, I remember thinking that the English text sounded forced and contrived-almost humorous in places. In preparation for this assignment, and as a review of the opera, I viewed the Metropolitan Opera's 1987 production starring Agnes Baltsa in the title role. The opera was sung in French with English subtitles provided. What first struck me about the Met's production was how well the text and music seemed to mesh. Though I am by no means fluent in French, it was immediately apparent that the musical themes were much more intimately joined with the French text than was the case with the English version I had attended previously. One other surprise was the fact that the solos, particularly the better-known arias, are simply more lyrical when sung in French. As I mentioned, Carmen was my first foray into the world of opera, and while reviewing it, I was surprised at how much of the music I remembered. The opening bars of the Overture-the brisk, march-like theme heard again at the opening of Act IV-are unmistakable and remind me more of a Sousa march than an operatic overture. As well, I recognized the Act I aria sung by Carmen outside the cigarette factory (I have since learned that this piece is called Habanera) during which Don Jos first glimpses Carmen and falls in love with her. (The Metropolitan Opera 1) I suppose my opinions about opera in general have been that the music is overly dramatic, the women overly large, and the plot lines overly romanticized. I was surprised to find, while viewing the Met's production, that Carmen reversed these opinions. Agnes Baltsa as Carmen was beautiful, seductive and captivating. Her rich mezzo-soprano was remarkably agile, particularly in the Habanera. Jos Carreras, as Don Jos, was handsome and masculine. Bizet scored this role for a tenor, but Carreras' voice seemed to me more of a high baritone, as his tone was rich and full, even in the upper register. His portrayal of the poor discredited and discarded corporal was compelling, and I was drawn into his tragedy to the point that, by the final act, I was ready to "do in" Carmen myself. The Metropolitan Opera production of 1987 was lavish in its costuming and staging-more so certainly than the live production I had attended. The trade-off, of course, is that the scope of the stage production was much greater, even if the costuming, sets, etc. were not. The plot and stage action of Carmen are fast-paced. There are a great many people moving across the stage-villagers, children, soldiers, smugglers, bull

Case Study Evaluation Essay Example | Topics and Well Written Essays - 2500 words

Case Study Evaluation - Essay Example As per the latest reports presented by the World Travel and Tourism Council, The sector has been demonstrating annual growth of 14% and also comprises of numerous tourism and leisure related projects which are worth more than ?35 billion. It is also important to mention that the tourism sector in Dubai comprises of 22.6% of the annual GDP of the Emirates (Dubai Update, 2008, p.1). The most important and prominent reason for the development of the sector is the location of the Dubai. Dubai is located between two of the major world tourism markets, namely, Asia and Europe. It does not take more than six or seven hours to fly from these regions to Dubai. This is coupled with the fact that is the home base of the Emirates which is one of the best airlines in the world. Accessibility accounts for one of the key factors for travelers and the location of Dubai at the gateway towards the Middle East provides major advantage to the region in terms of attracting visitors in the region. Coupled with sunshine round the year, world class infrastructure, high quality of services and also the best facilities of spas, restaurants, hotels and shops, Dubai accounts for an extremely popular and attractive destination for the ever increasing number of tourists. The place has been extremely effective in attracting tourists from across the globe which also accounts for one of the major reasons for the development of the tourism sector in the region. The increase in the number of tourists visiting the place since 1982 gets revealed through the following figure. Figure 1: International tourist arrivals in Dubai between 1982 and 2004 (Source: Henderson, 2006, p.3) Tourists have gradually gained extensive knowledge about the place and have developed a favorable impression about the place too. This has generated motivation among the tourists to visit the place and stay in a place which offers safety and security. Authorities have also played a major role in developing the safety and secu rity of the place and made huge public investments also. They have also actively implemented pro-tourism policies which have further provided a stimulus for the growth of the place through tourism. As apparent from the figure the rate of tourist visitors have remained substantially high in the region. The huge developmental potential of the place has also driven its tourism growth rapidly. As per the information provided by the WTCC, Middle East accounts for the only region in the world which achieved a growth of 7% in its tours and travel sector. This accounts for a total of approximately ?125 billion. This growth has also been able to generate and sustain 10.3% of employment of the region which corresponds to generation of roughly 5.7 million numbers of jobs (Dubai Update, 2008, p.2). Potential issues involved during the development of tourism Political and economic stabilities are few of the primary issues which could retard the progress of the tourism sector of any nation. Insta bility in the above two aspects might lead to volatility and disturbances which would deter not only tourists from visiting the place

Teaching assistant Essay Example for Free

Teaching assistant Essay A child’s main development from a new born baby to a 2 year old infant consists of a completely dependent newborn to a child who can lift their head and crawl within 6 months. Around this age a child’s growth begins to slow down to a weight gain of 450-600 grams a month, to then developing those skills to being able to walk within 2 years. A 3 year old would increase by roughly 1.8 kilograms and 5-8 centimetres, stereotypically they should continue to grow taller and slimmer however this will depend on nutrition and genetic makeup. At the age of 6 a child continues to gain, specifically between 8 – 9 years old. 2. Analyse key social, economic and enviroment factors, which may influence development. Approximately around 2.5 million children in the UK live in poverty, this ineffectively creates a social disadvantage, resulting in parents not being able to provide the necessary nutritional balanced diet because they are unemployed or on a low income. Parents and children within this category tend to live in poor housing, which can lead to overcrowding which lack the physical and personal resources needed for a child’s growth. 3. Describe children’s overall development needs. A child’s environment is a key factor that can prohibit or aid development. A positive environment with love and care will develop their socialising ability into creating relationships with others. Factors such as overcrowding, air, water and noise pollution have been proven to prohibit a child’s growth and development.

The Protagonist and Antagonist of Crime and Punishment :: Crime Punishment Essays

The Protagonist and Antagonist of Crime and Punishment      Ã‚  Ã‚  Ã‚  Ã‚   Crime and Punishment is considered by many to be the first of Fyodor Dostoevsky's great books.   Crime and Punishment is a psychological account of a crime.   The crime is double murder.   A book about such a broad subject can be made powerful and appealing to our intellectual interests if there is a link between the reader, the action, and the characters. Doestoevsky makes all these links at the right places.   The action takes place between the protagonists and the antagonists.   The protagonists include Dounia, the Marmeladovs, Sonia, Razumhin, Porfiry Petrovich, and Nastaya.   The antagonists of the story are Luzhin, Ilya Petrovich, and the landlady.   Raskolnikov could be considered to be the primary protagonist, while Svidrigailov could be thought of as the primary antagonist.      Ã‚  Ã‚  Ã‚  Ã‚   In every story the protagonist is the character that the reader cares most about.   In Crime and Punishment the reader cares about Rodion Raskolnikov.   He is the primary and most significant character in the novel. We are introduced to this complex character in Part 1.   We get to know the poverty stricken condition that he resides in, and we get to know his family situation as we read the long letter from Raskolnikov's mother. Then we witness the murder as it is graphically described by Doestoevsky. After reading this graphic description of the murder, how can the reader be sympathetic towards Raskolnikov?   How can the reader believe that a murderer is the protagonist?   It is, in fact,   not hard to accept this murderer as the protagonist.   Raskolnikov believed that by murdering the pawnbroker, he rid society of a pest.   We realize that if the victim would have been someone other than an evil old pawnbroker the crime would never had taken place.   He could never have found the courage to kill an innocent person.   It would not prove anything to him.   So, Raskolnikov was not a criminal. He does not repent because he does not feel that he had sinned. All he did was violate laws that were made by society.   Raskolnikov definition of crime was evil will in action.   Raskolnikov knows that he possesses no evil will, and so he does not consider himself a criminal.   He is capable of justifying his crime.

Why I Chose Construction Management

Page paper on why I choose construction manatees Construction has been in my background since 1988, when my father purchased his first piece of property. My brother and I wanted our room designed a certain way so we begged our father to fulfill our wants. In my father words, he said if you and your brother want your room other then the way IM designing it, then you two have to help build it. And that started my life in construction.As I furthered my education ND my experience grew In the construction field I also started to dabble in the business word. At the age of 17, I worked for my first construction company, Cap Stone Constructions. There, I was on the demolition crew Like most people that start off In the construction field. Not only did I demo, but I also learned how to frame, drywall, tape and mud. Not to long after my first Job, my father started his construction company and brought me on to work for him. There I worked various job in the residential sector as well as manage d his crew in his absence.From the outside looking in, it had seemed as though my father was making good money rehabbing buildings, renting them out and collecting money. As time went on, I started to notice that the residential sector was all that we dabbed in and even that sector was being run wrong. Yet, this was his construction company. Then I realized that his company was actually a company of family members, and him doing all the work. He was vary over worked in the construction field, and under educated In the In the business realm.For those reasons my father continued to make the same mistakes, and In turn get the same results. Till eventually, he ran himself Into the ground wondering why he worked so hard with minimal success. I am an entrepreneur by heart, so that means that different types of businesses interest me. I've owned several businesses from furniture stores to catalog distribution companies. I even owned a contracting company where I had contracted independent contractors to drive for a transportation business I ran.In my search for he perfect business to start, I realized that I always reverted back to the construction field and maybe that was where I needed to be focusing my entrepreneurial spirit. So I started kef contracting, and began to make the same mistakes as my dad. I focused on rehab and family members to help with my vision. I knew very little about the other sectors, the 16 divisions of construction, or even how to formulate a contract. All I knew was obtain some property, fix It up with small loans from small lenders, and rent It out.But having an entrepreneurial split, I knew that there was more to owning a construction company, so I returned to school. Taking construction management has taught me a lot about what I didn't know on how to run a successful to put construction and business together, two of my favorite subjects. By the end of this course, I should have the knowledge I need to go along with the experience I have in construction and in business, and put them together the right way to formulate a strong foundation for a successful construction business.

The Millennial Marijuana Movement When Millennials Rule...

The Millennial Marijuana Movement When Millennials Rule: The Reshaping of America, is a book by David and Jack Cahn that goes in depth on pressing issues in America such as gun control, abortion, and even marijuana. They touch on college debt as well as environmental protection and equality. They are brilliant young men that do a great job of pointing out the millennial standpoint on these various views and do well describing what millennials can do about these issues. A key point in this book is also how Millennials will reshape the political structure of the country and how Washington will not be the same after our generation is done with it. Marijuana legalization has been a topic of interest for many years in this country. How to regulate it? Tax it? Where it can be used? By whom? How old? Who can sell it? Federally legal or locally legal? The penalties involving it? All of those are questions that have been debated about and fought over in courts of law. Hundreds of thousands of Americans have been jailed for minor crimes involving Marijuana. It has many proven benefits both economically and medically. The times are changing and prohibition against marijuana is starting to fade away. Although still illegal federally, it is now fully legal in eight different states, and medically legal in thirty! This is great progress, but still isn’t enough. Marijuana will soon be legalized. There is plenty of benefits and I am fully for the legalization of marijuana nationwide. CahnShow MoreRelatedCharter Schools Are The Best Schools1608 Words   |  7 Pagesâ€Å"independent entities that have received a charter, which is a set of self-written rules (and promises) about how the school will be structured and run† (Pascual, 2016, The Truth About Charter Schools). This means that they have their own rules that work for the children and meet their individual needs. The schools could change the rules, as generations change, to accommodate different students. With the unity and numbers of millennials, charter schools could be known as the best type of schools for studentsRead MoreMillennials Drive For School Choice1894 Words   |  8 PagesMillennials’ Drive for School Choice It is notable that the school system has major flaws where variation in methods has caused success and failure to come from different students; this is partially due to the way types of schools function. The flaws in the school system are highlighted in the chapter â€Å"Better Schools: Investing in our future,† from the book, When Millennials Rule: The Reshaping of America, written by David Jack Cahn. They are trying to bring the millennials’ future actions andRead MoreLibrary Management204752 Words   |  820 PagesCard Number: 2007007922 ISBN: 978–1–59158–408–7 978–1–59158–406–3 (pbk.) First published in 2007 Libraries Unlimited, 88 Post Road West, Westport, CT 06881 A Member of the Greenwood Publishing Group, Inc. www.lu.com Printed in the United States of America The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48-1984). 10 9 8 7 6 5 4 3 2 1 To our grandchildren Annika, Jacob, Katherine, Madison, Magnus, and Molly