Escolar Documentos
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Cultura Documentos
Acquisition:
■ A larger company buying a smaller one
Divestiture
■ A firm selling off one or more of its business units (often unrelated or
underperforming units)
Spin-off
■ Setting up one or more of the company’s units as new businesses (purpose: to
raise capital)
Joint venture
■ 2 companies setting up a new (outside) company for collaboration and joint
ownership
Mergers:
AT&T Wireless merged with Cingular, to become
the national leader in cell phone service.
Cingular no longer exists as a brand.
Acquisitions:
JPMorgan Chase bought Bear Stearns for $240
million (March 17, 2008)
Google purchased DoubleClick, an online
advertising company, for US$3.1 billion. (April
2007)
HP bought Compaq Computer. Although the
Compaq brand name still exists, the company
no longer exists.
Divestitures:
The U.S. Department of Justice will require
Verizon to sell off Unicel's mobile phone
infrastructure in six areas of Vermont, New York
and Washington (6/10/2008)
GE announced it will sell its GE Appliances
division. Possible buyers include Electrolux,
Haier and LG Electronics.
Spin-Offs:
In 2004, GE (General Electric) spun-off its
mortgage and life insurance companies into a new
company called Genworth Financial. It also sold its
Financial Guaranty Insurance Company, a backer
of municipal and corporate bonds, to a consortium
of companies.
Lehman Brothers will spin off to its shareholders
$25 billion to $30 billion of its commercial real
estate assets into a separate publicly-traded
company to strengthen its balance sheet & keep
the value of the real estate company (Sept. 2008)
Joint Ventures:
UOP, a subsidiary of conglomerate Honeywell,
announced today that it has signed a letter of
intent with bio-oil veteran Ensyn to form a joint
venture to produce second generation biofuels
for power generation, heating and eventually
transportation. (Sept. 10, 2008)
Chairman
Shareholders
Board of Directors
CEO
President
CFO V.P.s
Rights Risks
Elect the Board of The value of stock
Directors declines.
Benefit from stock
Dividends are cut or
appreciation
(increase in value) not paid.
Receive dividends In case of
Appoint auditors to bankruptcy, the
judge the company’s stockholders are
financial statements last in line to receive
Approve the issue of compensation (usually
new shares / stocks nothing is left).
or the repurchase of
existing stocks
Protect investors’ interests
Assure that the company is profitable
and stable
Decide on “big picture” corporate
issues
Vote on important strategic moves
Review financial results
Establish corporate management
policies
Appoint and fire upper-level managers
Evaluate performance of high-level
managers
Process:
election
Process:
hire /
appointment
9
Head of the Board of Directors
Presides at meetings
Sets the Board’s agenda
Makes sure the directors have
world
Focus on strategic issues
Accountable to Board for the
company’s performance
Selects senior executives and assists
operations
Responsible for carrying out orders
of the Board
Vice-presidents of company divisions