An Evaluation Of Mergers And Acquisitions Management Essay

An Evaluation Of Mergers And Acquisitions Management Essay In the modern world, most of the companies try to merge their company with another company. There are some advantages and disadvantages in merging. The main advantages are reputation, brand image can be increase through the merging. The industry will become simple through merging and this is the competitive advantage, Alcatel Lucent Company can gain from the merging. The main disadvantage in merging is cross culture conflicts and this case study is about Alcatel Lucent merger. Alcatel Lucent is one of the leading companies in mobile, fixed, Optics technologies and a pioneer in applications and services (Alcatel Lucent, 2011). According to the merging procedure, Alcatel Lucent merger faced cross culture conflicts from France and U.S. Still, the company tries to control the culture conflicts in the organization. This report mainly describes the conditions and negotiation factors, industry changes after merger and the international challenges of Alcatel Lucent. 1. The conditions and ne gotiation factors pushed forth the merger in 2006 that were not present in 2001 According to the case, in 2006 both companies come up with new conditions and negotiation factors. Mainly, France shareholders, they gave their approval to merge Alcatel company and Lucent company. Alcatel’s chief executive Mr. Techuruk encouraged 1500 shareholders in Paris by mentioning Alcatel Lucent is truly global and has no equivalent today and won’t in future. He also agreed to pay 10.6 billion euro for Lucent company to merge Alcatel and Lucent companies as Alcatel Lucent. The stock swap was valued at one Alcatel American depository share for every five Lucent shares. Both companies agreed to publish English as the official language of the Alcatel Lucent. After considering above conditions and factors, both company shareholders gave their approval to merge Alcatel Lucent as one company. They also decided to deal with both pre-merger and post-merger integration issues such as salaries , benefits, designations and other structural maters by holding a series of meetings between the top HR executives at the two companies. 2. merged company A merged company which means the combination of two companies where one corporation is completely absorbed by another corporation. After the merging procedure, both companies have to do business as one company. As a result of that, they should invent new identities for the company. They couldn’t use their separate identities for the business. Any company, they couldn’t merge with another company without the approval of shareholders. Negotiation also very important for merged companies. Negotiation is the process of discussion by which two or more parties aim to reach a mutually acceptable agreement (Strategic International Management, 2011). There are five stages included in the negotiation process. Those stages are preparation, relationship building, exchanging task related information, persuasion and concessions an d agreement. Mainly, any organization, they wants to follow this negotiation process when they planning to merge their company with another company. Alcatel is a company which produce the communication equipments for their customers and Lucent company, they provides telecommunication services to their customers. After merging these two companies, their industries become simple. As Alcatel Lucent, they did their sales of $25 billion. They also produced many telecommunication products such as wireless equipments, wire line equipments, wireless infrastructures, internet routers, equipment for carrying calls over the internet, etc. The negative side of the industry is company loss $7 billion since the merger. In addition to that, Alcatel Lucent around 16500 jobs since merger. As the advantages of the industry, for the fourth quarter 2006, the company posts adjusted pro-forma revenues of Euro 4,421 million and operating profits of Euro 21 million. The company reported Euro 18,254 million adjusted pro-forma and operation profit of Euro 1,025 million for the full year 2006. On 31st December 2006, their total cash and marketable securities was Euro 6.7 billion leaving a net cash position of Euro 508 million.