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International Acquisitions

International Acquisitions. International Acquisitions. Pre-Acquisitions Finance review Risk Management Post-Acquisitions Project management approach Integration Organizational and social approach. Stages of Finance Review. Selection of target Valuation The deal Assessment the outcome

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International Acquisitions

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  1. International Acquisitions

  2. International Acquisitions • Pre-Acquisitions • Finance review • Risk Management • Post-Acquisitions • Project management approach • Integration • Organizational and social approach

  3. Stages of Finance Review • Selection of target • Valuation • The deal • Assessment the outcome • Managing the outcome

  4. Methods in Finance Review • Dividend discount model • Asset-based valuation • Cash flow-based valuation • Accounting-based methods • Real options

  5. Risk Management • Sources of risks • Virtual • Estimable • Perceived directly • Measure and control approach

  6. International Acquisitions • Pre-Acquisitions • Finance review • Risk Management • Post-Acquisitions • Project management approach • Integration • Organizational and social approach

  7. Project Management Approach • Project team • Acquirer creates a team for the purpose of performing integration • Project Risk • Risk identification • Risk quantification • Risk response development • Risk response control • Monitoring Project Progress • Value drivers and measures

  8. International Acquisitions • Pre-Acquisitions • Finance review • Risk Management • Post-Acquisitions • Project management approach • Integration • Organizational and social approach

  9. Organization and Social Approach • To identify the sources of synergy • To create intrinsic value • To establish strategic planning • To keep management retention • To get union involvement • To promote corporate communication

  10. Case Study : the IBM/Lenovo deal • Chinese company Lenovo Group Limited acquired IBM’s personal computer business in 2005 at the value of $1.75 billion • It signals the arrival of China as global player in key industries • Direct competition with Dell and HP in PC business

  11. Lenovo’s Challenges • Management integration in new company • Retention of the customers

  12. The Outcome • Offsetting IBM’s Weaknesses • Retention of IBM senior executives • Quick Management Integration

  13. Discuss the following questions: • What problems do IBM/Lenovo deal address? • What issues and challenges do IBM/Lenovo deal present? What can be done to address these issues? • What are the business issues that should be addressed when Lenovo acquire IBM PC business?

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