A merger/takeover is the acquiring of another business's resources and services as a form of maximising sales revenue and profits as well to remain competitive and increase market share.
The AT&T proposal to takeover would have allowed them to control 43% of the US mobile phone market, in this case the takeover would have benefitted greatly from it as they would be able to manipulate the pricing of phone services as most customers would have to purchase from them making other competitors have set prices to compete with their own. They would also have been catering for over 128 million customers, which would potentially boost their sales revenue by a large amount and from forecasts would have generated savings of over $40 billion which would recuperate the bidding amount of the $39 billion for the T-mobile company.This can be said to be a form of horizontal integration as they would have taken over a major ...view middle of the document...
This takeover is particularly successful as Tata motors aims to aid JLR in terms of providing finance for their operations and expansion without necessarily involving itself in the runnings of management to avoid any clashes as Tata is an indian based brand while JLR is of the UK so as to not discourage existing and potential customers from purchasing from the company as they might feel Tata will make changes to what they desire in their products. This would retain JLR's customer satisfaction therefore upholding the brand image and reputation. The Tata and JLR takeover is also a good one as they are both in related markets of cars which would have made it easier to manage and invest appropriately in to make the profits it is now, similarly so with the Kraft foods and Cadbury takeover. Kraft bought cadbury for a huge amount of money which most investors did not see as a profitable decision some more strongly than others like one of their major investors, Warren Buffet who saw the takeover as a mistake, but it proved to be the opposite as it has allowed the company to exceed annual profit targets and is still doing so .
However a takeover strategy can backfire especially if it was a hostile one, this is because the businesses have not come together through mutual agreements and therefore conflict of interests, management styles as well as cooperate objectives will affect the success of the overall business. Also if enough research has not been previously undertaken to understand the background of the business to be acquired and commencing to make out plans to help in the successful running of the current business and the business to be merged with a lot of costly mistakes can be made that could set back on profit targets and stunt growth until adequate efficiency is maintained for the business as a whole to be stable.
I wouldn't agree that a takeover makes success inevitable as every business is different and there are external and internal factors which if not managed properly could turn the takeover into the downfall of the business rather than improve its competitiveness or profits