Page 112 - DMGT545_INTERNATIONAL_BUSINESS

Unit 6: Modes of Entering International Business

notes
Example:
1. The Long Success International (Holdings) Ltd. merged with City Faith Investments
Ltd on the 8th of April 2008. The value of the merger was US $3.2 million. The agency in
this instance was Bermuda Monetary Authority, Hong Kong Stock Exchange and other
regulatory authority that was unspecified.
2. Novartis AG acquired 25% stake in Alcon Inc. This acquisition was worth 73,666 million
common shares of the company. They bought this stake from Nestle SA for $10.547 billion
by paying $143.18 for every share. It was a privately negotiated transaction that needed
to have a regulatory approval. Simultaneously, Novartis AG also received an offer of 52%
interest that was equivalent of 153.225 million common shares of Alcon Inc.
3. Kinetic Concepts acquired each and every remaining common stock of LifeCell Corp for
$51 for each share. Their total offer was $1.743 billion. The deal was done in accordance to
regulatory approvals and the conventional closing conditions.
4. Kapstone Paper & Packaging Corp acquired the kraft paper mill as well as other assets of
MeadWestVaco.Corp. They paid them $485 million. The deal was conducted as per the
regulatory approvals, receipt of financing and conventional closing conditions. This deal
included a lumber mill in Summerville, hundred percent interest in Cogen South LLC. The
Chip mills in Kinards, Elgin, Andrews and Hampton in South Carolina are also parts of
this deal.
5. Petrofalcon Corp acquired the remaining shares of Anadarko Venezuela Co from Anadarko
Petroleum Corp. The deal was worth 428.46 million Venezuelan bolivar or US $200 million.
The deal was completed as per the regulatory approvals.
6. Discover Financial Services, LLC acquired Diners Club International Ltd from Citigroup
Inc. The deal was worth US $165 million. The deal was subjected to regulatory approvals
and normal closing conditions. Cobham PLC took over MMI Research Ltd. The deal was
worth $16.6 million or $33.099 million. In this deal $12.2 was paid in cash, $1.4 million in
loan notes and almost $3 million in payments related to profits.
7. WNS (Holdings) Ltd from India, took over the total share capital of Chang Ltd. The deal
was worth $9.6 million. Of this amount $8 million was to be paid in cash and the rest was
to be paid in payments related to profits.
8. AptarGroup Inc acquired the Advanced Barrier System wing of the CCL Industries Inc.
The deal was worth almost 9.4 million Canadian dollars. The entire amount was paid on
cash. Varian Inc from USA took over 23% stakes of Oxford Diffraction Ltd. The deal was
worth $4.6 million pounds. $3.5 million was paid in cash, and the rest was to be paid from
the profits made by the company.
9. Spice PLC took over Melton Power Services Limited. The deal was worth $4.5 million. $2.5
million was paid in cash and the rest was to be paid from the profits made by the company.
Spice PLC also got Utility Technology Ltd., GIS Direct Ltd, and Line Design Solutions Ltd
as part of the deal.

self assessment

Fill in the blanks:
6. The optimal entry mode for the firms depends to some degree on the nature of their core
competencies. A distinction can be drawn between firms whose core competency is in
……………… and those whose core competency is in ……………….
7. When ……………… constitutes a firm’s core competence, foreign franchise controlled by
joint ventures seems to be optimal.

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