Файл: Н.П. Морозова Limited Liability Companies in the ГюЛ. Mergers and Takeovers. Fundamentals of Entrepreneurship.pdf

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productive and less profitable than corporations with more narrowly defined product lines.

At the present time, a new round of business combinations is under way. This recent wave of merger mania has been the result of a number of factors, including (1) a desire to make operational improvements, (2) the profit potential of such deals (the leveraged buyout permits investors to make a big return on their investment, and foreign buyers are also seeking profits), and

(3) the current political and regulatory climate (e.g., the deregulation4 of certain industries and relaxed rules for trusts).

Some critics of the present merger wave believe that such deals are creating a huge burden of high - risk corporate debt that could ruin companies if the economy slips and profits decline. Proponents of such deals, though, argue that shareholders benefit from merger activities.

Despite all of the mergers and consolidations that have taken place in American business in recent years, the size of the average company has been declining. The reason is the huge number of new businesses formed each year, particularly those with fewer than 20 employees. Many fail especially in times of recession, but others take their place.

4. Answer the following questions:

1.What are the aims of firms’ using mergers, takeovers, divestitures and other procedures?

2.What do we call the fusion of two companies into one when both companies wish to join together?

3.What can mergers and acquisitions enable a company to gain?

4.Does a hostile takeover occur against the wishes of one company?

5.What are the two basic ways of hostile takeovers?

6.At what price does a raider offer to buy shares?

7.What are two less radical ways of combining companies?

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8.What benefit did General Motors get from the joint venture with Toyota?

9.Are mergers new to the American business scene?

10.What was the purpose of horizontal mergers?

11.What companies did vertical mergers combine?

12.What are conglomerate mergers?

13.What is the recent wave of “merger mania” due to?

14.Do mergers produce more good than harm according to some critics?

15.Does the size of the average American company tend to increase or decrease?

5. For each word in A find the one in B which has the same meaning:

A

1) response; 2) to combine; 3) portion; 4) to gain; 5) to occur; 6) battle; 7) to improve; 8) rival; 9) to eliminate; 10) benefit; 11) therefore; 12) diverse; 13) huge; 14) to reduce; 15) to permit; 16) current; 17) relaxed; 18) regulation; 19) to decline

B

a) to allow; b) fight; c) answer; d) for that reason; e) to go down; f) to cut; g) part; h) competitor; i) of the present day; j) various; k) to join together; l) to become better; m) rule; n) profit; o) less severe; p) to obtain; q) very big; r) to take place; s) to remove

6. Match each term on the left with its definition on the right:

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business

B

1. Read the text and say what new facts you learned from it.

Mergers and Takeovers

There are several relationships that may grow up between businesses in Great Britain and the United States of America. The most popular are mergers and takeovers.

With a merger, two or more companies involved will consult with each other previously. They try to make a certain agreement on their merger to the satisfaction of both companies.

In a takeover one company buys a controlling interest in another company by acquiring at least 51% of its shares. The company does this by making a direct approach (обращаясь непосредственно) to the company’s shareholders for their shares. The company intending to take over will not necessarily consult the company it is taking over.

The Stock Exchange Council in London has drawn up a code of practice (Правила) to regulate takeovers to prevent some abuses (злоупотребления). One such abuse is secret dealing (действия) when a company wishes to take over secretly and buys its shares secretly. Another abuse is insider (лицо,

имеющее в силу служебного положения конфиденциальную информацию) dealing thanks to information used for personal profit.

While reading about mergers and takeovers we come across various terms. Some of them are as follows:

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3. Translate from Russian into English:

Генри Форд выстроил свою компанию в 1903 году по вертикали. Он закупил каучуковую плантацию в Бразилии, участок леса в Канаде и рудник в Америке. Завод Генри Форда по производству автомобилей находился в Дирбоне (Dearborn), куда и осуществлялись поставки леса, каучука и горной руды. Уже через двадцать лет вертикаль себя не оправдала.

Альфред Слоун, создатель компании Дженерал Моторс, придерживался идеи горизонтальной интеграции. Он купил готовые автомобильные компании и заводы, производителей комплектующих. Горизонтальная схема Слоуна существует и в настоящее время.

С

1. Read the following texts and find the answer to the question preceding each text:

1. What was the main idea of setting up a joint - venture that was launched in Seoul?

Kia, South Korea’s second largest vehicle maker, and Ford Motor Credit, a unit of Ford of the US, established a joint venture car finance company (ссудная компания) for Korean buyers. Kia Ford Credit Finance had an initial paid - in capital (начальный внесенный капитал) of Won (вона, денежная

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единица Северной и Южной Кореи) 33.3 bn ($ 44m) which increased yearly. The venture launched on January 1,1996 in Seoul, with plans to expand nationwide. The car financing venture didn’t limit itself to financing Kia and Ford car buyers.

2. What did the shareholders of TSB Group approve?

Shareholders of TSB Group approved the bank’s merger with Lloyds Bank, and the change of name of their company to Lloyds TSB Group. The merger took effect (вступило в силу) from December 28,1995. The shareholders also voted to allow TSB directors to make arrangements for Lloyds Bank share option holders (держатели опциона на акции) to be given options over Lloyds TSB shares.

3.What is curious in the demerger (разделение объединившихся ранее предприятий) of the US healthcare group Baxter International?

The demerger of the US healthcare group Baxter International is in several ways a classic of the genre. First, Baxter is splitting off (разделяет) the manufacturing and distribution activities.

Second, it is unpicking (разрывает) a decade - old merger with its larger rival American Hospital Supplies, which was largely designed to bring manufacturing and distribution together. It might also seem curious that only two years ago, Baxter carefully considered demerging the business and decided against it. The impression remains that Baxter’s demerger is very much in line (в соответствии) with the prevailing fashion; take a vertically integrated business and pick it apart, with a view to possible horizontal merger with fresh partners.

4.What does “Banco de Napoli” intend to do with its branches (отделения, филиалы)?

Banco de Napoli, the troubled Italian bank, intends to sell or close chronically loss - making Italian branches, while unproductive foreign branches will be disposed of (избавляться) or turned into representative offices.

5.What are the terms of the agreement between Johnson and Johnson and Cordis?

Cordis, the US maker of cardiology equipment and other medical devices, agreed to a takeover by Johnson and Johnson in a deal valued at about $ 1.8bn. Under the terms of the agreement, Cordis would keep its Miami, Florida headquarters (главное управление) and its name.

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SECTION 3 FUNDAMENTALS OF ENTREPRENEURSHIP

1.Read the newspaper articles and do the following tasks common to all of them:

1.State the main problems discussed in the article.

2.Point out the paragraphs which contain the most important information.

3.Point out the paragraphs that can be omitted without a substantial change of the contents.

4.Compress paragraphs choosing only the sentences which contain the most important information (the key sentences).

5.Work out which words you can leave out of the key sentences without losing the meaning.

6.Express the main idea of each paragraph in one - two sentences.

7.Make up a plan of the article in the form of the key sentences.

8.Make a synopsis of the article.

9.Shorten the text of the article at the most and give the annotation of the article.

A

DEVELOPMENT OF ENTREPRENEURSHIP

Millions new enterprises start each year despite more than a 50% failure rate. Starting and managing a new business involves considerable risk and effort to overcome all the inertia against creating something new. In creating and helping a new venture to grow, the entrepreneur has all the responsibility for its development, growth and survival, as well as corresponding risks and rewards.

Who wants to accept all the risks and effort involved in creating a new venture? Who is an entrepreneur? What is entrepreneurship? These frequently asked questions reflect the increased international interest in the field. In spite of all this interest, a concise, universally accepted definition has not yet emerged. The word entrepreneur is French and literally translated, means “between-taker” or “go-between”. Let’s take a look at the entrepreneurship from a historical perspective.

EARLIEST PERIOD

One early example of a go-between is Marco Polo, an Italian, who was one of the first Europeans who sailed to the Far East. He attempted to establish trade routes to China. He signed a money contract with a money person to sell his goods. That money person was a forerunner of today’s