Give An Example Of A Successful Merger Or Acquisition In Recent Years Why Was It Successful.pdf

lOMoARcPSD|38545333 THUONGMAI UNIVERSITY ENGLISH DEPARTMENT - - DISCUSSION TOPIC Give an example of a successful merger or acquisition in recent years? Why was it successful? Teacher: Nguyen Thi Hang Class : 232_ENPR5121_04 Group : 6 Hanoi, 2024 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 BẢNG PHÂN CÔNG NHIỆM VỤ STT Họ và tên Nhiệm vụ Đánh giá 1 2 Nguyễn Thị Ngát Content, A (Hoàn thành 3 Powerpoint tốt nhiệm vụ, 4 nộp bài đúng 5 Hoàng Phạm Kim Ngân Content hạn, có đóng Lê Thị Thùy Ngân góp ý kiến) Đoàn Quốc Nhân Leader, Outline, A ( Hoàn Word thành tốt nhiệm vụ, nộp Content bài đúng hạn) A (Hoàn thành Hà Thị Như Ngọc Content + tốt nhiệm vụ, Minigame có đóng góp) B+ (Hoàn thành tốt nhiệm vụ, nộp bài muộn ) A (Hoàn thành tốt nhiệm vụ, đóng góp ý kiến nhiệt tình) Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 TABLE OF CONTENTS TABLE OF CONTENTS 3 I INTRODUCTION 4 1.1 Introduction 4 1.2 De昀椀nition of merger and acquisition 4 1.2.1 What is merger? 4 1.2.2 What is acquisition? 4 1.2.3 De昀椀nition of Merger and Acquisition 4 1.2.4 Types of Mergers and Acquisitions 4 II THE ACQUISITION OF 21ST CENTURY FOX BY DISNEY 5 2.1 Walt Disney’s acquisition of 21st Century Fox .5 2.1.1 Background of Walt Disney and 21st Century Fox 5 2.1.2 The reason for the acquisition of 21st Century Fox and its situation in that time 5 2.2.The process of the acquisition 6 2.2.1 Early developments (November 2017–April 2018) 6 2.2.2 Bidding war between Disney and Comcast (May–July 2018) 6 2.2.3 Road to completion (July 2018–March 2019) 7 2.2.4 The outcome of the acquisition 7 III WHY WAS THE ACQUISITION SUCCESSFUL? 8 3.1 Reasons why the acquisition was successful 8 3.1.1 Content Portfolio .8 3.1.2 Streaming Strategy 8 3.1.3 Market Position and Financial Success 8 3.1.4 Synergies 9 3.2 Lessons learned 10 3.2.1 Key factors that contributed to the success of the merger 10 3.2.2 Implications for other companies considering M&A 11 IV CONCLUSION 12 1 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 V REFERENCE 12 I INTRODUCTION 1.1 Introduction In the ever-evolving landscape of business, mergers and acquisitions serve as pivotal moments that can reshape industries and rede昀椀ne corporate strategies One such exemplary case of a successful merger or acquisition in recent years stands as a beacon of e昀昀ective integration and strategic foresight By delving into the details of this union, we can uncover the key factors that propelled its success and understand the intricate dynamics at play in today's competitive market 1.2 De昀椀nition of merger and acquisition 1.2.1 What is merger? A merger involves the total absorption of a target 昀椀rm by the acquirer As a result, one 昀椀rm ceases to exist, and only the new 昀椀rm (acquirer) remains 1.2.2 What is acquisition? An acquisition involves one 昀椀rm buying only a portion of another 昀椀rm The acquisition may happen to acquire assets or an altogether di昀昀erent segment of the other 昀椀rm 1.2.3 De昀椀nition of Merger and Acquisition - Mergers and acquisitions (M&A) are business transactions in which one business consolidates with another, known as a merger, or one business takes over another, known as an acquisition In business, people often refer to the entire process as acquisitions and mergers, even though the two words technically have di昀昀erent meanings (You may also see the term shortened to M&A) - Acquisitions and mergers can generate signi昀椀cant pro昀椀ts for the companies involved, as well as the investment banking industry, which is often involved in the M&A legal process 2 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 1.2.4 Types of Mergers and Acquisitions 1 Mergers 2 Acquisitions 3 Consolidations 4 Tender O昀昀ers 5 Acquisition of Assets 6 Management Acquisitions II THE ACQUISITION OF 21ST CENTURY FOX BY DISNEY 2.1 Walt Disney’s acquisition of 21st Century Fox 2.1.1 Background of Walt Disney and 21st Century Fox Walt Disney and 21st Century Fox are two of the largest media and entertainment companies in the world, with a long and rich history of producing and distributing various forms of content, such as 昀椀lms, television shows, theme parks, streaming services, and merchandise Here are some brief summaries of their backgrounds: - Walt Disney: Founded in 1923 by brothers Walt and Roy Disney, the company started as a small animation studio that produced short cartoons and later feature 昀椀lms, such as Snow White and the Seven Dwarfs, Pinocchio, and Fantasia The company expanded into live-action 昀椀lms, television, and theme parks, such as Disneyland and Walt Disney World The company also acquired other studios and brands, such as Pixar, Marvel, Lucas昀椀lm, and 21st Century Fox, and launched its own streaming service, Disney+, in 2019 The company is currently led by CEO Bob Chapek and Executive Chairman Bob Iger - 21st Century Fox: Formed in 2013 as a spin-o昀昀 of the original News Corporation, the company inherited the 昀椀lm and television assets of the former conglomerate, such as 20th Century Fox, Fox 3 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 Broadcasting Company, Fox News, and Fox Sports The company also owned other cable networks, such as FX, National Geographic, and Star India, and had stakes in Hulu, Sky, and Endemol Shine Group The company was acquired by Disney in 2019, with the exception of the Fox Broadcasting Company, Fox News, Fox Sports, and Fox Business, which were spun o昀昀 into a new company, Fox Corporation The company was formerly led by CEO James Murdoch and Executive Chairman Rupert Murdoch 2.1.2 The reason for the acquisition of 21st Century Fox and its situation in that time - The reason for the acquisition of 21st Century Fox by Walt Disney was to expand Disney's content library and streaming services, as well as its international presence and market share Disney wanted to compete with other online platforms like Net昀氀ix and Amazon by o昀昀ering more appealing and diverse entertainment options to consumers around the world - The situation of 21st Century Fox before the acquisition was that it was facing challenges from the changing media landscape and the rise of online streaming Fox had also failed to acquire Sky, a European satellite broadcaster, after a prolonged regulatory review and a bidding war with Comcast Fox decided to sell its entertainment assets to Disney and focus on its news and sports businesses, which were spun o昀昀 into a new company called Fox Corporation 2.2.The process of the acquisition 2.2.1 Early developments (November 2017–April 2018) - On November 6, 2017, CNBC reported The Walt Disney Company was negotiating a deal with Rupert Murdoch to acquire 21st Century Fox's 昀椀lmed entertainment, cable entertainment, and direct broadcast satellite divisions, including 20th Century Fox, FX Networks, and National Geographic Partners 4 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 - On December 14, Disney and Fox con昀椀rmed a $52.4 billion deal to merge the two companies, pending approval from the United States Department of Justice Antitrust Division - It was reported on November 10 that the prospected deal had yet to be fully abandoned On November 16, it was reported that Comcast (parent company of NBCUniversal, X昀椀nity, and Comcast Spectacor), Verizon Communications, and Sony (parent company of Sony Pictures, Sony Music, and Sony Interactive Entertainment) had also joined Disney in a bidding war for 21st Century Fox 2.2.2 Bidding war between Disney and Comcast (May–July 2018) - On June 20, Disney and Fox announced they had amended their previous merger agreement, upping Disney's o昀昀er to $71.3 billion (a 10% premium over Comcast's $65 billion o昀昀er), while also o昀昀ering shareholders the option of receiving cash instead of stock - On July 13, Disney received the support of the Institutional Shareholder Services and Glass Lewis, the two most prominent proxy adviser 昀椀rms in the world Fox shareholders were recommended by the advisers as means to provide for Disney's future - On July 16, CNBC reported Comcast was unlikely to continue its bidding war with Disney to acquire Fox Instead, Comcast would likely continue pursuing the 61% stake of Sky - On July 19, Comcast o昀케cially announced it was dropping its bid on the Fox assets in order to focus on its bid for Sky 2.2.3 Road to completion (July 2018–March 2019) - On July 25, 2018, TCI Fund Management, the second largest shareholder of 21st Century Fox, indicated it voted to approve the Disney–Fox deal On July 27, Disney and Fox shareholders approved the merger between the two companies 5 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 - On March 19, 21st Century Fox o昀케cially completed distribution of new Fox shares ahead of the completion of the Disney deal The deal was o昀케cially completed that night 2.2.4 The outcome of the acquisition - The deal would include 20th Century Fox's 昀椀lm rights to certain third-party franchises, such as X-Men, Deadpool, and Fantastic Four, the distribution rights to Star Wars: Episode IV – A New Hope , as well as consolidate ownership of other franchises both share such as Home Alone and give Disney access to adult animation with ownership of The Simpsons and Family Guy  10,000 people will lose their jobs While bringing enormous pro昀椀ts to Disney, it also comes with signi昀椀cant consequences Many news outlets estimate that nearly 10,000 employees at Fox will lose their jobs The simple reason is that Disney will undoubtedly restructure the entire newly acquired asset block Reducing sta昀昀 to minimize costs and transferring key faces of the company to management is natural This unemployment 昀椀gure will certainly impact the overall economy and create a ripple e昀昀ect as many other companies also 'cleanse' their teams to confront this major competitor III WHY WAS THE ACQUISITION SUCCESSFUL? 3.1 Reasons why the acquisition was successful 3.1.1 Content Portfolio The acquisition signi昀椀cantly expanded Disney's content library, adding popular franchises like "X-Men," "Avatar," "The Simpsons," and the "Fantastic Four" to its already impressive lineup Especially, the “X-Men” franchise which help Disney to complete their cinematic 6 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 universe of superheroes in Marvel, further enhance their dominance over the market of superhero movies 3.1.2 Streaming Strategy The acquisition played a crucial role in Disney's strategy to enter the streaming market Disney launched its own streaming service, Disney+, in November 2019, and the addition of Fox's content contributed to the platform's diverse o昀昀erings Plus the increase in Hulu shares as each company owned 30% of the streaming platform 3.1.3 Market Position and Financial Success The acquisition strengthened Disney's position as a major player in the global entertainment industry, allowing the company to compete more e昀昀ectively with other media conglomerates While the acquisition undoubtedly contributed to Disney's dominance in the traditional box o昀케ce realm, its far-reaching e昀昀ects extended beyond cinema halls The diversi昀椀ed content o昀昀erings played a crucial role in supporting Disney's various revenue streams, including merchandise, theme parks, and, most notably, streaming services, which help the entertainment titan stay a昀氀oat during the 7 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 Covid pandemic, when box o昀케ce revenue tank Moreover, its help the company make a triumphant comeback after the pandemic, with the Avatar franchise itself brought in 2,3 billion dollars of box o昀케ce revenue to the house of Mickey with its sequel "Avatar: The Way of Water" 3.1.4 Synergies Disney aimed to achieve synergies by integrating Fox's assets with its existing operations The amalgamation of iconic franchises such as "X-Men," "Avatar," and "The Simpsons" with Disney's 8 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 existing powerhouse of brands created a synergistic entertainment powerhouse And also synergy in streamlining distribution, and potentially reducing costs 3.2 Lessons learned 3.2.1 Key factors that contributed to the success of the merger The merger between Walt Disney and 21st Century Fox has been largely considered a success It was a complex deal with many moving parts, so there are several key factors that lead to its positive outcome:  Content Expansion and Streaming Domination: - Disney gained access to Fox's extensive library of 昀椀lm and TV content, including popular franchises like Avatar, X-Men, and The Simpsons This signi昀椀cantly bolstered Disney's streaming o昀昀erings, particularly Disney+, making it a more attractive platform for subscribers - The merger gave Disney a controlling stake in Hulu, a crucial player in the streaming wars This allowed Disney to in昀氀uence content decisions and leverage Hulu's subscriber base to further their streaming ambitions  Develop Market Power and Synergy: - Fox brought international assets to the table (contributed its international holdings to the deal), expanding Disney's footprint in key growth markets This diversi昀椀ed their revenue streams and strengthened global brand presence - Combining operations allowed for cost-saving measures like streamlined production and distribution Sharing resources and expertise across the merged entity led to increased e昀케ciency and innovation 9 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333  Strategic Leadership and Execution: - Disney had a well-de昀椀ned plan for how to integrate Fox's assets and leverage them to achieve their goals This included a focus on streaming and international expansion, which proved to be successful - Both companies had seasoned executives who oversaw the integration process, navigating challenges and making key decisions that ultimately bene昀椀ted the merged entity Overall, the success of the Disney-Fox merger can be attributed to a combination of acquisitions, e昀昀ective content and market expansion, strong leadership, and successful execution It has solidi昀椀ed Disney's position as a global entertainment powerhouse and placed them at the forefront of the streaming wars 3.2.2 Implications for other companies considering M&A The Disney-Fox merger holds several implications for other companies considering M&A deals, o昀昀ering both potential bene昀椀ts and challenges to consider:  Positive implications: - Disney's success highlights the importance of acquiring valuable content libraries in the age of streaming It serves as a reminder that acquiring valuable content is essential in the era of streaming Companies seeking to compete in this space should consider similar strategies of acquiring franchises to attract and retain subscribers - The merger shows the potential bene昀椀ts of combining complementary strengths and resources The other should consider M&A that allows them to access new technologies, or expertise to create synergies and drive growth 10 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 - By acquiring Fox, Disney unlocked new markets and solidi昀椀ed its position as an entertainment leader M&A can be a faster and more e昀昀ective way to achieve global reach and tap into new growth opportunities - The successful execution of the merger underscores the critical role of an integration plan for other companies pursuing M&A deals  Negative implications: - Large-scale mergers like Disney-Fox can face signi昀椀cant regulatory hurdles due to potential antitrust concerns Companies should be prepared for lengthy approval processes and potential concessions - Merging companies with di昀昀ering cultures can be challenging and lead to employee confusion, resistance, and decreased morale - The high cost of M&A deals can increase debt, potentially impacting a company's 昀椀nancial stability Companies need to carefully assess the 昀椀nancial risks and ensure they have a plan to manage debt responsibly - Integrating large, complex organizations can be a lengthy and resource-intensive process Have a realistic understanding of the challenges involved and allocate su昀케cient resources to ensure a smooth transition IV CONCLUSION In conclusion, the Disney-Fox merger o昀昀ers valuable lessons for other companies considering M&A While it presents potential bene昀椀ts, it also highlights the importance of risk management Ultimately, the success of any M&A deal depends on a thorough 11 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 understanding of the speci昀椀c circumstances and a commitment to strategic execution V REFERENCE 1 https://www.indeed.com/career-advice/career-development/mergers- and-acquisitions 2 https://e昀椀nancemanagement.com/mergers-and acquisitions#De昀椀nition_of_Merger_and_Acquisition 3 https://www.investopedia.com/terms/m/mergersandacquisitions.asp 4.https://www.researchgate.net/publication/ 371510964_Analysis_of_the_Walt_Disney's_acquisition_of_21st_Cent ury_Fox/fulltext/64885bd7d702370600ef64c7/Analysis-of-the-Walt- Disneys-acquisition-of-21st-Century-Fox.pdfhtt 12 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 5 https://thewaltdisneycompany.com/walt-disney-company-acquire- twenty-昀椀rst-century-fox-inc-spino昀昀-certain-businesses-52-4-billion- stock/ 6 https://en.wikipedia.org/wiki/Acquisition_of_21st_Century_Fox_by_Dis ney 7 https://www.cbr.com/disney-purchase-fox-costly-mistake-insiders- believe/ 8 https://www.theguardian.com/media/2017/jun/29/all-you-need-to- know-21st-century-fox-sky-takeover-deal 9 https://collider.com/disney-fox-deal-explained/ 10 https://www.theguardian.com/昀椀lm/2019/mar/20/disney-seals- 71bn-deal-for-21st-century-fox-as-it-prepares-to-take-on-net昀氀ix 11 https://thewaltdisneycompany.com/disneys-acquisition-of-21st- century-fox-will-bring-an-unprecedented-collection-of-content-and- talent-to-consumers-around-the-world/ 12 https://en.wikipedia.org/wiki/Acquisition_of_21st_Century_Fox_by_Dis ney 13 https://screenrant.com/disney-fox-purchase-four-years-on/ 14 https://businessmodelanalyst.com/is-disney-pro昀椀table/ 15 https://seekingalpha.com/article/4450008-disney-worlds-largest- media-company-becoming-even-stronger 16 In conversation: Four keys to merger integration success | McKinsey 13 Downloaded by HANH LA (tailieuso.12@gmail.com) lOMoARcPSD|38545333 17 15 success factors for merger and acquisition processes (antwerp management school.be) 18 M&A - Important Considerations, Implications of Mergers & Acquisitions | Wall Street Oasis 19 M&A - Considerations, Implications, Impacts, Reports (corporate昀椀nanceinstitute.com) 14 Downloaded by HANH LA (tailieuso.12@gmail.com)