UnitMergersandacquisitions81Thetermmergersandacquisitions(M&A)referstotheprocessoftwocompaniesmergingintooneoronecompanyacquiringanother.Whataresomeofthereasonswhytwocompaniesdecidetomerge?Reasonswhytwocompaniesdecidetomergeinclude:Expandmarketshare:Bymerging,thecompaniescancapturealargershareofthemarketandgainmorecustomers.Enhancecompetitiveness:Themergedentitycancombineresources,technology,andtalent,therebyincreasingoverallcompetitiveness.Costsavings:Mergingcanleadtosharedresourcesandreducedoperationalredundancies,resultingineconomiesofscale.Enternewmarkets:Amergercanhelpcompaniesenternewgeographicareasormarkets,expandingtheirbusinessreach.Diversification:Mergerscandiversifyacompany’sbusiness,reducingdependenceonasinglemarketorproduct,andtherebyloweringrisk.2Haveyoueverheardofacompanyacquiringanother?Howdoyouthinkthisacquisitionaffectedtheproductsorservicesofferedbythecompany?Acquisitionscanaffecttheproductsorservicesofferedbythecompanyinseveralways:Productlineexpansion:Acquisitionscanbringnewproductsorservicesintothecompany’sportfolio,enrichingitsofferings.Technologyintegration:Acquisitionscanintroducenewtechnologiesandexpertise,enhancingthequalityandcompetitivenessofexistingproductsorservices.Brandimpact:Thecompany’sbrandimagemaychangepost-acquisition,potentiallybecomingstrongerormorediverse.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovemegamergeranagreementthatunitestwolargecorporations,typicallyinatransactionworthbillionsofdollars,intoonenewlegalentitye.g.Themegamergerbetweenthetwoleadingpharmaceuticalgiantsisexpectedtoreshapetheglobalhealthcaremarket.backbonethemostimportantpartofanorganization,asetofideas,etc.e.g.Theselong-termclientsarethebackboneofourbusiness.wrapthintransparentplasticusedtocoverfoode.g.Ourcompanyspecializesinmanufacturinghigh-qualitywrapforthefoodserviceindustry.titanapersonoranorganizationthatisveryimportantorsuccessfule.g.JDhasemergedasane-commercetitan,dominatingtheonlineretailspacewithitsvastproductselection.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovelayofftheactofstoppingaworker’semploymentbecausethereisnotenoughworke.g.Thestartup’sfailuretosecureadditionalfundingledtoapainfulroundoflayoffs.irrevocablyinawaythatisimpossibletochangee.g.Onceacompanysignsalong-termcontractwithamajorsupplier,itisirrevocablycommittedtothetermsoftheagreement.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovegreatapersonoranorganizationthatisadmiredbyalotofpeoplee.g.Huaweiiswidelyregardedasagreatinthetechnologysectorforitscontinuousinnovation.mega-dealalargeandcostlytransactionbetweentwocorporations,ofteninvolvingamergerofthetwoortheacquisitionofonebytheothere.g.Whennewsbrokeofthemega-dealbetweenthetwopharmaceuticalgiants,investorscloselywatchedtoseehowthecombinedcompanywouldrestructureitsR&Dpipelinesandmarketstrategies.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveconglomeratealargebusinessorganizationconsistingofseveraldifferentcompaniesthathavejoinedtogethere.g.Theconglomeratedecidedtodivestsomeofitsunderperformingsubsidiaries.spearhead

tobethefirstorleadingexampleofanewidea,plan,ormovement

e.g.Theinnovativestartupisdeterminedtospearheadthedevelopmentofartificialintelligence-drivencustomerservicesolutions.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveTheDow-DuPontmegamerger：AdealonlyWallStreetcouldloveactivistsb.whoworkshardtoachievesocialorpoliticalchange,especiallyasanactivememberofanorganizatione.g.Theconsumerrightsactivistscalledforaboycottofthecompany’sproductsuntilitaddressedtheissuesoffalseadvertisingandproductquality.slashtoreduceanamount,aprice,etc.byalargeamounte.g.Theretailerannouncedthatitwouldslashthepricesofitswinterclothingcollectiontoclearinventory.costsynergythesavingsinoperatingcostsexpectedafterthemergeroftwocompaniese.g.Themanagementteamofthenewly-mergedfinancialinstitutionsisworkinghardtoidentifyandrealizecostsynergies.antitrustintendedtopreventcompaniesfromunfairlycontrollingpricese.g.Theantitrustinvestigationintothee-commercegianthasdrawnwidespreadattention.

TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovecountertopacounterinakitchene.g.Whenchoosingacountertopforacommercialkitchen,restaurantsneedtoconsiderfactorssuchasheatresistance,easy-to-cleanproperties,andcosteffectiveness.synthetic

producedbycombiningdifferentartificialsubstances,ratherthanbeingnaturallyproducede.g.Thetextileindustryisincreasinglyrelyingonsyntheticmaterialssuchaspolyesterandnylon.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovepesticideachemicalsubstanceusedtokillinsectsandsmallanimalsthatdestroycropse.g.Thepesticideindustryisunderpressuretodevelopmoresustainableandeco-friendlyproducts.dogtocausetroubleforsb.overalongperiodoftimee.g.Thecompanyhasbeendoggedbyfinancialdifficultiesforyears.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovego-gousedtodescribeafinancialperiodorbusinessinwhichthereisespeciallyfastandactivedevelopmente.g.Thego-gorealestatemarketinmajorcitiesattractedalargenumberofinvestors.spartoarguewithsb.,especiallyinapleasant,friendlywaye.g.Duringthenegotiationofthebusinesscontract,therepresentativesofbothsidessparredoverthetermsofpayment.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovepetrochemicalstheindustrialactivityofmakingproductsfromoil,andtheproductsthemselvese.g.Thepetrochemicalsindustryplaysacrucialroleintheglobaleconomy,supplyingawiderangeofproductsthatareessentialforvarioussectors.totteringbecomingweaker,andlikelytofailorende.g.Theonce-mightydepartmentstorechainisnowtotteringonthebrinkofbankruptcy.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveeconomicmalaiseaprolongedperiodofsloweconomicgrowth,usuallyaccompaniedbyhighunemploymente.g.Thegovernmentimplementedaseriesofstimuluspoliciestocombattheeconomicmalaise.upsidethepositivepartofasituationthatisgenerallybade.g.Inthemidstoftheglobaleconomicmalaise,theupsideforsometechnologycompaniesisthatthedemandforremote-workingandonline-learningsolutionshassurged.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveaggregatetocometogetherintoonemassorwholee.g.Intheconstructionindustry,multiplesubcontractorsaggregatetheireffortstocompletelarge-scaleinfrastructureprojects.collude

toworkwithsb.secretly,especiallyinordertodosth.dishonestorillegale.g.Thetwomajorcompaniesintheindustrywerefoundtohavecolludedtofixprices.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveshrinktobecomesmallerinamount,size,orvaluee.g.Thecompany’sprofitmarginsshranksignificantlylastquarter.remedytodealwithaproblemorimproveabadsituatione.g.Facingasignificantdeclineincustomersatisfactionscores,thehotelchainlaunchedacomprehensivetrainingprogramforitsstafftoremedythesituation.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlovescuttletoruinorendsb.’splansorchanceofbeingsuccessfule.g.Theleakedinternalmemoscuttledthecompany’smergernegotiationswithitscompetitor.TheDow-DuPontmegamerger:AdealonlyWallStreetcouldloveUnderstandingthetext1Decidewhetherthefollowingstatementsaretrue(T),false(F),ornotgiven(NG)accordingtothetext.____1.TheupcomingmergerbetweenDowChemicalandDuPontwillbethebiggestcorporatemergerever.____2.DowandDuPonthavelongbeentheleadersinbringingnewcreationstothemarket.____3.EllenKullmanattachedgreatimportancetoresearchanddevelopment,holdingitwouldbeDuPont’smainengineforfuturegrowth.____4.ThestrongdollarandthesluggishinternationaleconomyhavesignificantlyimpededtheprogressofDowandDuPont.FTTTUnderstandingthetext____5.Investorsdonotlikecompaniesthatinvesttoomuchinresearchanddevelopment.____

6.DuetothehighlyconsolidatedmarketinwhichDuPontandDowalreadyoperate,antitrustregulatorsarelikelytocloselyscrutinizethecombinedindustrialconglomerate.____

7.GeneralElectrichadtowithdrawfromadealtosellitsappliancebusinesstoElectroluxafterencounteringregulatoryobstacles.TTNGUnderstandingthetext2Discussthefollowingquestions.1.WhatdoesthetitleofTextAmean?2.Accordingtothetext,whatmightbetheresultoftheDuPont-Dowdeal?3.Whatdoesthephrase“investorsbelievedthecompanywasmissingout”suggestinPara.11?4.Whenwillmonopolyhappen?Whataretheproblemswithmonopoly?5.Toyourknowledge,arethereanylawsinChinaagainstmonopoly?Understandingthetext1.

WhatdoesthetitleofTextAmean?Thetitle“TheDow-DuPontmegamerger:AdealonlyWallStreetcouldlove”suggeststhatthemergerbetweenDowChemicalandDuPontisprimarilyfinanciallymotivatedandmaybenefitinvestorsandfinancialanalystsonWallStreetmorethanthecompanies’employeesorthebroaderpublic.Thephrase“onlyWallStreetcouldlove”impliesthatwhilethemergermayleadtoshort-termfinancialgains,itmayalsoresultinnegativeconsequences.Thisreflectsacriticalviewthatthemergerisdrivenbyfinancialinterestsratherthanthelong-termhealthandinnovationofthecompaniesinvolved.Understandingthetext2.Accordingtothetext,whatmightbetheresultoftheDuPont-Dowdeal?Theresultwillbemasslayoffs,dramaticcorporatechanges,andabruptbelt-tighteningofresearchbudgets.Itwillturnouttobetheworld’ssecond-largestchemicalgiant,oneofthebiggestcorporatemergersinarecord-settingyearformega-deals.Understandingthetext3.

Whatdoesthephrase“investorsbelievedthecompanywasmissingout”suggestinPara.11?Inthiscontext,“investorsbelievedthecompanywasmissingout”meansthatsomeinvestorswereoftheopinionthatDowwasnotfullycapitalizingonitspotentialoropportunities.ThestatementsuggeststhatdespiteDow’sstrongfinancialperformanceandupcomingmergerwithDuPont,someinvestorsremainedskepticalaboutthecompany’slong-termprospectsandgrowthpotential.Understandingthetext4.Whenwillmonopolyhappen?Whataretheproblemswithmonopoly?Monopolyisasituationwhereasinglecompanyorgrouphascompletecontroloveramarket,preventingcompetitionandlimitingconsumerchoice.Monopoliescanoccurinavarietyofindustries.Insomecases,monopoliesmaybeformedthroughmergersandacquisitions,whereonecompanyacquiresmultiplecompetitorstogainmarketdominance.Whenasinglecompanyhastoomuchcontroloveramarket,itcanleadtohigherprices,lowerqualityproductsorservices,andlimitedinnovation.Monopoliescanalsostiflecompetitionandpreventnewbusinessesfromenteringthemarket,whichcanbeharmfultoconsumersandtheeconomyasawhole.Understandingthetext5.Toyourknowledge,arethereanylawsinChinaagainstmonopoly?InChina,therearelawsagainstmonopolyandotheranti-competitivepractices.TheStateAdministrationforMarketRegulationisresponsibleforenforcingtheselaws.TheAnti-monopolyLawofthePeople’sRepublicofChinaprohibitsbusinessesfromengaginginmonopolisticpractices,suchascontrollingasignificantportionofthemarket,fixingprices,orforbiddingcustomersfromdealingwithcertaincompetitors.IthasalsoreleasedfourregulationssupportingtheAnti-monopolyLawtostrengthentherelatedlegalsystem.Theregulationsprohibitactsthatabuseadministrativepowerstoexcludeorrestrictcompetition,reachmonopolizationagreements,orabusedominantmarketpositions.backoutB.tofightorarguewithsb.overdifferentopinionsandbeliefscrackdownC.tonameapersonorathinginhonorofsb.elsename…for…D.tobecomemorestrictindealingwithaproblemandpunishingthepeopleinvolvedclashwithE.tostopemployingsb.becausethereisnoworkfortheemployeetodolayoffA.todecidenottodosth.thatonehadpromisedtodoLanguagework1spinoffF.tocreateanewproduct,company,orprojectfromanexistingoneMatchthephraseswiththeirmeanings.Languagework2Completethefollowingsentenceswiththeproperformofthephrasesfromtheaboveexercise.1.Thecompanyfinallydecidedto

_________

theirnewproductline_________

theirfounder,hopingtoleveragehislegacytoboostsales.2.Investorswereoptimisticwhentheboarddecidedto_________

thehealthcaredivisiontounlockgreatervalue.3.Aftersigningthecontract,thevendordecidedto

___________ofthedealatthelastminute.4.Thecompanyhadto__________asignificantnumberofemployeesduetofinancialdifficulties.5.Thegovernmentisplanningto_____________onillegalbusinessesoperatinginthecity.6.Thedemands______________themanagement’splansforcost-cuttingmeasures.namespinoff

backout

crackdown

layofffor

clashwithLanguagework3TranslatethefollowingexpressionsintoChinese.1.belt-tighteningofresearchbudgets

2.specialtyproducts3.fail-fast-fail-ofteninventiveness

4.generateorganicgrowth5.anindustrialconglomerate6.regulatoryresistance削減研究預(yù)算監(jiān)管阻力（從）頻繁失敗（中學(xué)習(xí)）的創(chuàng)新精神產(chǎn)生有機(jī)增長工業(yè)集團(tuán)特色產(chǎn)品UsingonlineresourcestofacilitatecomprehensionUtilizingonlineresourcestoaidreadingcomprehensioncanbehighlybeneficial,especiallywhenreadersdealwithcomplextextsorunfamiliartopics.TheInternetprovidesaccesstoawidevarietyoftools,fromdictionariesandencyclopediastospecializedforumsandacademicjournals,ensuringthatthereareresourcesavailableforeverytypeofinformationneed.Onlineresourcesarereadilyavailable,allowingreaderstoquicklylookupterms,concepts,orbackgroundinformationastheyread,whichcanenhancetheirunderstandingandretentionofthetext.Onlinenewssourcesandblogscanprovidereal-worldcontexttotheoreticalconcepts,makingiteasiertograsphowtheyapplyinpracticalsituations.Forumsanddiscussiongroupsenablereaderstoaskquestionsandengagewithotherswhomighthavesimilarqueriesoradditionalinsights,fosteringacollaborativelearningenvironment.WithconstantlyupdatedcontentonbusinessUsingonlineresourcestofacilitatecomprehensionnewswebsitesandprofessionalforums,readerscankeeptheirknowledgecurrentonemergingtrends,technologies,andindustrychanges.Whenusingthesetools,itisalsoimportanttoevaluatethecredibilityofthesourcebycross-referencinginformationfrommultiplesources.ReadingTextA,readerswillcomeacrosssuchbusinesstermsas“merger,”“activistinvestors,”“cashflow,”“organicgrowth,”“antitrust,”etc.Theycouldturntoonlinebusinessencyclopediasforhelpandgetthesetermsexplainedinsimplelanguage.Theycouldalsokeyinkeywordssuchas“Dow-DuPontmerger”inasearchenginetoreadmorerelatednews,reports,oracademicpapersfromDow’sofficialwebsite,majornewswebsites,orotherresources.HowtocapitalizeonM&Atakeovertheactofgettingcontrolofacompanybybuyingmostofthestockinite.g.Thehostiletakeoverattemptbytherivalcompanysentshockwavesthroughtheindustry.writeofftoofficiallysaythatadebtnolongerhastobepaid,orofficiallyacceptthatyoucannotgetbackmoneyyouhavespentorloste.g.Afterseveralyearsoffailedattemptstocollectthedebt,thebankdecidedtowriteofftheoutstandingamount.HowtocapitalizeonM&Awalk-awaypricetheminimumvalueoroutcomethatyouarewillingtoacceptinanegotiatione.g.Duringthemergernegotiations,theCEOofthesmallercompanyfirmlystatedtheirwalk-awayprice,belowwhichtheywouldnotconsiderthedeal.cross-functionalmanageramanagerwhohasexpertiseinandresponsibilityformultiplefunctionalareaswithinanorganization

e.g.Thecross-functionalmanagerplayedapivotalroleinthecompany’snewproductlaunch.HowtocapitalizeonM&Aconfirmationbiasthetendencytoprocessinformationbylookingfororinterpretinginformationthatisconsistentwiththeirexistingbeliefs

e.g.Confirmationbiascanbeamajorobstacleinstrategicdecision-making.ex-postafterthefacte.g.Ex-post,thecompanyrealizedthatthedecisiontocutcostsbyreducingemployeetrainingwasamistake.HowtocapitalizeonM&Awrite-downareductioninthevalueofanassetinacompany’saccounts,whenitiscalculatedtobeworthlessthanpreviouslyshowne.g.Thecompanyannouncedasignificantwrite-downofitsinventoryvalueduetoasuddendropinmarketdemandforitsproducts.meritocracyasocialsystemthatgivesthegreatestpowerandhighestsocialpositionstopeoplewiththemostabilitye.g.Inameritocracy,individualswithinnovativeideasandstrongworkethicshavetheopportunitytorisethroughtheranksquickly.HowtocapitalizeonM&Aroadshowatravelingshowaroundthecountryentertainingthepublic,advertising,orprovidingaservicee.g.Thetechnologycompanyorganizedaroadshowacrossmajorcitiestopromoteitsnewsoftwareproduct.UnderstandingthetextAnswerthefollowingquestions.

1.Accordingtothetext,whydomanyM&Adealsfail?2.WhatcouldbedonetoavoidfallingintothetrapofmakingastrategicM&Adealthatdoesn’tmakefinancialsense?3.WhatcouldseniorexecutivesdowithcorporateculturaldifferencesintheM&Adeal?4.Whatdoes“they’realwaysonthesideofthedeal,notthecompany”implyinPara.9?5.Whatshouldcompaniesdotolinkdeal-makingwithintegration?Understandingthetext1.Accordingtothetext,whydomanyM&Adealsfail?OnereasonisthatmanyseniorexecutivesarenotexperiencedinmakingbigM&Adeals.Theycouldonlydealwithoneortwohighlyconsequentialdealsthroughouttheirprofessionallife.Theseareoftenthemostchallengingandriskyendeavorstheyencounter.Theytendtonothaveenoughexperienceinthistypeofhugetask.Understandingthetext2.WhatcouldbedonetoavoidfallingintothetrapofmakingastrategicM&Adealthatdoesn’tmakefinancialsense?Peopleinvolvedshouldlookatthedealmorefromafinancialperspective.First,askyourselffourkeyquestions:Whymerge?Whythiscompany?Whynow?Whatisthefairvalue?Thenactlikeafinancialinvestor:Seta“walk-awayprice”andsticktoit.Ateamcomposedofcross-functionalmanagerscanhelptoputacheckonconfirmationbias,impulsiveness,andevenhubris.Understandingthetext3.WhatcouldseniorexecutivesdowithcorporateculturaldifferencesintheM&Adeal?Theyneedtobecomeawareofthecorporateculturaldifferences.Thentheycouldtrytoidentifythemajorityofculturalissuesandgetthesolutionspreparedbeforethedealclosessoastomakethedealwork.Understandingthetext4.Whatdoes“they’realwaysonthesideofthedeal,notthecompany”