Organization development

Résumé du document

During the year 2006, around 28,000 mergers and takeovers have been registered. It is 9,000 more than in 2003, and reflects well the fact that to keep
growing, companies need sometimes an external support.
This phenomena concern all private and public companies, and is a major strategic point in the
globalized business scenario.

So far, it will be interesting in this report analyzing some international cases such as: Air-France / KLM, Thomson / Reuters, GDF / Suez, Daimler / Chrysler, BP /Amoco and Rentokil / PCL. I will proceed the same way with all the cases.

To start with, I will present briefly the two companies and then I will analyze the drivers that made the deal to occur. To conclude, I will make comments on the success or failure of the operation.

Extraits

[...] This company is listed in the New-York and Toronto stock exchanges. The Ke y pe ople : Da vid Thoms on (Cha irma n). Re ute rs : Founded in London in 1851, Reuters is a global information company. It provides indispensable information tailored for professionals in the financial services, media and corporate markets. In 2006, the Reuters Group realized a turnover of 2.6 Billion. The company registered about 370,000 professional users and approximately 17,000 staff in 94 countries to provide real-time data. [...]

[...] So far, it will be interesting in this report analyzing some international cases such as: Air-France / KLM, Thomson / Reuters, GDF / Suez, Daimler / Chrysler, BP / Amoco and Rentokil / PCL. I will proceed the same way with all the cases. To start with, I will present briefly the two companies and then I will analyze the drivers that made the deal occur. To conclude, I will make comments on the success or failure of the operation. I ) aIr france - KlM I - a ) The Two coMPanIes Air-Fra nce : Created in 1933, it is the primary national flag carrier in France. [...]

[...] Its two core activities were: passenger & freight transport and electricity generation & distribution. Then the company started to diversify and organized its activities into 6 divisions: transport, industrial service, construction, electronics, leisure and publishing11. VI - b ) The drIVers The drivers of this hostile takeover by Rentokil on BET in 1996 were: Increase its market shares Become a worldwide leader in service providing Take advantage of the both companies experience The drivers that pushed Rentokil to acquire BET were that they wanted to boost revenue growth (improve services and marketing effectiveness), reshape the portfolio of services and obviously improve the efficiency and productivity of the brand. [...]

[...] This operation was a real success. Even if the concept of group, two companies' was unusual, synergies developed by the two brands appeared to be very effective and profitable. Nowadays, Air-France-KLM is a leader in the global transportation industry. During the last financial year 2006-07, the turnover increased by to reach 23.07 Billion, the operating income increased by at 1.24 Billion and the net income reached the Million.2 The brand successfully developed in all major markets (passenger transportation and freight), strengthened its profitability trough cost containment and developed profitable synergies such as codesharing, maintenance process etc.3 Concerning the figures in the stock exchange, the price of a share in 2003 was 9.5 and it reached at the end of 2006. [...]

[...] In fact, this ‘mixed' development represents a model of differentiation among the other actors such as Ford and BMW. The key drivers of this merger were: Reinforce financial power of both companies Increase market shares to become the 5th worldwide car manufacturer Take competitive advantage, thanks to a differentiation strategy The fact that Chrysler was suffering a long series of setbacks and that Daimler was looking for a company which is not too expensive but with a good background to merge with and create a bigger group, made those two companies decide to enter the negotiations. [...]