Tag Carve Outs

Heading for Brexit?

Hold on, it may never happen

So on Thursday 23 June 2016 a majority of British voters chose the Brexit option. This unexpected result has caused major ripples across the globe.

The next step is for the UK prime minister to invoke Article 50, following which two years of negotiations take place and then Britain (or, more accurately, the United Kingdom – see the box below) leaves the EU unless there is unanimous agreement amongst the remaining states to extend exit negotiations.

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The Fat MAN defense

Fiat mixtura – but which one

The fat man defense is a company strategy whereby an acquisition is made to increase the size of a business so that it is more difficult to acquire. Fiat mixtura is a Latin phrase that can be loosely translated as “let the integration be made.” But will an integration involve a fat MAN? Read more

Are Private Equity firms buying the right due diligence?

Are their needs the same as those of corporate buyers?

Private Equity companies and Corporates tend to buy a very similar scope of acquisition due diligence services. They buy a huge financial due diligence (FDD) exercise, usually also containing a significant tax component; they buy legal due diligence; and they might buy a bit of operational due diligence (ODD), a bit of commercial due diligence (CDD), and maybe a bit of the supporting products such as IT due diligence (ITDD) and HR due diligence (HR). But Private Equity companies and Corporates have very different internal skill bases, and therefore need to buy different acquisition due diligence products. So why don’t they?
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The obligations of a debt rating agency

To whom are the ratings agencies legally accountable?

So McClatchy Newspapers has discovered that in late 2007 some analysts at Moody’s Investors Service were “downsized” for expressing concerns about the accuracy of the ratings being applied to some of the CDOs (collateralised debt obligations), especially those comprising MBSes (mortgage backed securities).

The news group alleges that Read more

We should expect some mergers to fail

Why should mergers or carve-outs differ from other change programs?

Every report on the state of mergers and acquisitions points out that a proportion of mergers fail to deliver the intended benefits. Similarly, reports on the success of projects convey a similar message – some projects fail. Mergers are amongst the largest and most complex projects that companies must implement, and are not ‘run of the mill’ for most companies, so shouldn’t we expect mergers to fail – at least until we can implement projects successfully? Read more

GM’s intellectual property smokescreen?

“Transferring GM’s jewels to Russia via Opel”

The media report that General Motors was loathe to sell (a full or partial stake in) its European Opel operations to the Magna consortium because it is concerned that this will provide a conduit via which GM’s intellectual property (“IP”) might end up in the hands of GAZ, a competitor to the Chevrolet brand in Russia. Today the media report that GM has agreed to sell to the Magna-led consortium, but that there are conditions attached to the sale. I find this approach somewhat strange, and wonder whether it is a smokescreen. Read more

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