INSTITUT NATIONAL DES TECHNIQUES ECONOMIQUES ET COMPTABLES

CONSERVATOIRE NATIONAL DES ARTS ET METIERS

En collaboration avec le Centre National dEnseignement Distance - Institut de Lyon

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CORRIG DEVOIR 4

2008/2009

Denis BOODHU

ANGLAIS APPLIQU AUX AFFAIRES

I. Comprehension (7 points)
1. Questions (4 pts)
a. Mergers and acquisitions
A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring
firm retains its identity, while the acquired firm ceases to exist. A merger is just one type of
acquisition. One company can acquire another in several other ways, including purchasing some or all
of the companys assets or buying up its outstanding shares of stock.
In general, mergers and other types of acquisitions are performed in the hopes of realizing an
economic gain. For such a transaction to be justified, the two firms involved must be worth more
together than they were apart. Some of the potential advantages of mergers and acquisitions include
achieving economies of scale, combining complementary resources, garnering tax advantages, and
eliminating inefficiencies. Other reasons for considering growth through acquisitions include
obtaining proprietary rights to products or services, increasing market power by purchasing
competitors, shoring up weaknesses in key business areas, penetrating new geographic regions, or
providing managers with new opportunities for career growth and advancement.
b. Joint venture
A joint venture is a business enterprise undertaken by two or more persons or organizations to share
the expense and profit of a particular business project. Joint ventures are not business organizations in
the sense of proprietorships, partnerships or corporations. They are agreements between parties or
firms for a particular purpose or venture. A joint venture is, in effect, a form of partnership that is
limited to a particular purpose. Joint ventures have grown in popularity in recent years, despite the
relatively high failure rate of such efforts for one reason or another.
Most joint ventures are formed for the ultimate purpose of saving money. This is as true of small
neighborhood stores that agree to advertise jointly in the weekly paper as it is of international oil
companies that agree to work together for purposes of oil and gas exploration or extraction. Joint
ventures are attractive because they enable companies to share both risks and costs.
By teaming up with other people or businesses in a joint venture, you can:
extend your marketing reach,
access needed information and resources,
build credibility with a particular target market,
access new markets that would be inaccessible without the partner.

MINISTERE DE LA JEUNESSE, DE LEDUCATION NATIONALE ET DE LA RECHERCHE

ANGLAIS APPLIQU AUX AFFAIRES

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The main difference between a joint venture and a partnership is that the members of a joint venture
have teamed together for a particular purpose or project, while the members of a partnership have
joined together to run a business in common.
c. Micro, small and medium-sized enterprises
Micro, small and medium-sized enterprises are defined according to their staff headcount and
turnover or annual balance sheet total.
A medium-sized enterprise is defined as an enterprise which employs fewer than 250 persons and
whose annual turnover does not exceed EUR 50 million or whose annual balance sheet total does not
exceed EUR 43 million.
A small enterprise is defined as an enterprise which employs fewer than 50 persons and whose
annual turnover and/or annual balance sheet total does not exceed EUR 10 million.
A micro enterprise is defined as an enterprise which employs fewer than 10 persons and whose
annual turnover and/or annual balance sheet total does not exceed EUR 2 million.
d. Economies of scale
Economies of scale refer to economic efficiencies that result from carrying out a process (such as
production or sales) on a larger and larger scale. The resulting economic efficiencies are usually
measured in terms of the unit costs incurred as the volume of the relevant operation increases. Scale
economies can be present in nearly every function of a business, including manufacturing, purchasing,
research and development, marketing, service network, sales force utilization, and distribution.
Many small business operations are of insufficient size to utilize economies of scale to major strategic
advantage, though there are instances in which even smaller businesses can use such economic
efficiencies to gain an edge over startup competitors.
Due to economies of scale, larger companies have greater access to markets in terms of selecting
media to access those markets, and can operate with larger geographic reach.
e. Trade liberalization
Removal of or reduction in the trade practices that thwart free flow of goods and services from one
nation to another. It includes dismantling of tariff (such as duties, surcharges, and export subsidies) as
well as non-tariff barriers (such as licensing regulations, quotas, and arbitrary standards).
2. (3 pts ; 0,5 pt par faute)
a. WRONG: Latin America has substantial human capital.
b. RIGHT: more recently mergers and acquisitions have been the most common type of
investment.
c. NM
d. RIGHT: This European experience is now being widely studied in Latin America.
e. NM
f. RIGHT: the growth of imports from the EU has exceeded the growth of exports to Europe.
g. WRONG: This is at odds with the EUs proclamations.
h. RIGHT: A fresh start by the EU with Brazil and Mexico could prove promising.

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CORRIG DEVOIR 4

II. Version (5 points)

Un nouveau dpart pour lEurope en Amrique latine ?
lhorizon 2050, le Brsil et le Mexique figureront parmi les six premires conomies mondiales,
daprs les analystes de la banque dinvestissement Goldman Sachs. LEurope en est-elle consciente,
ou lAmrique latine sera-t-elle sa prochaine occasion commerciale rate ?
Au cours des quatre dernires annes, lAmrique latine a attir en moyenne 61 milliards de dollars
par an en investissements trangers directs, dont 60 % environ ont t investis au Brsil et au
Mexique. Dans les annes 1990, les investisseurs taient principalement intresss par les programmes
de privatisation dans la rgion. Aujourdhui, les investissements portent surtout sur les fusions et
acquisitions et dans de nouvelles infrastructures. LEspagne est sans surprise le principal investisseur
europen en Amrique latine, bien que plusieurs oprations espagnoles dimportance soient
rcemment passes aux mains de socits italiennes, notamment lentreprise Endesa, acquise par le
groupe italien Enel, qui est aujourdhui le principal producteur et distributeur priv dnergie en
Amrique latine.
Il faut esprer que davantage de socits europennes importantes suivront cet exemple. Mais les
petites et moyennes entreprises (PME) majoritaires en Europe et en Amrique latine peinent
tablir des changes commerciaux et investir au niveau international, en partie cause du cot lev
des transactions et de linformation. En Europe, des collectifs de PME ont pu raliser des conomies
dchelle qui leur ont permis daccder aux marchs mondiaux. Cette exprience europenne est
prsent tudie de prs en Amrique latine.

III. Grammar (3 points ; 0,5 point par faute)

1. The conditional
a. If my parents had not (hadnt) been poor, I would have had more books.
b. If I had not missed (hadnt) many classes at school, I could have learnt (learned) more.
c. If I had been (Id been) more clever, I would (could) (might) have done better at school.
d. If I had not (hadnt) failed my exams, I might have got a well-paid job.
e. If I had got (Id got) married, I might have had children.
2. Indirect speech
a. John warned that if they didnt reduce their costs, then they might face closure.
b. Mary suggested looking for areas where savings could be made (they should look for areas).
c. Henry stated that he couldnt agree with the budget cut.
d. He warned that if his departments budget was reduced, it would be very difficult for them to meet
targets.
e. John reminded him that if they couldnt make the savings, then there would be no targets to meet.

IV. Expression personnelle (5 points)

A trading bloc is a group of countries which agree to trade freely between themselves, eliminating
tariffs, quotas, preferences on most (if not all) goods and other barriers to trade.
The removal of tariffs and other barriers to trade means that goods and services can move freely and
possibly become cheaper for the countries in the trading bloc. In addition, this will lead to more trade
between member countries.

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ANGLAIS APPLIQU AUX AFFAIRES

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However, the disadvantages of joining a trading bloc are less than the advantages. Indeed, the market
for a member of a trading bloc will increase. As a result, this could mean large scale production, thus
it benefits from economies of scale. Unit costs will be low; hence, goods can compete in world
markets and can earn export revenue. Consequently, there will be a high level of economic growth
and the standard of living increases. Moreover, situations of war with neighbours could be avoided.
On the other hand, however, the country may lose its freedom to plan independently.
A group of countries, such as the North American Free Trade Area (Canada, Mexico, and the United
States), pledged to remove barriers to mutual trade, though not to movements of labour or capital. As
a matter of fact, each member continues to determine its own commercial relations with nonmembers, so that a free trade area is distinguished from a customs union by the need to prevent the
most liberal of its members from providing an open door for imports. This is done by agreeing rules of
origin, which set the terms on which goods manufactured outside the area may move from one state to
another within it.
Unlike a customs union, members of a free trade area do not have the same policies with respect to
non-members meaning different quotas and customs. In order to avoid evasion (through reexportation) the countries use the system of certification of origin most commonly called rules of
origin where there is a requirement for the minimum extent of local material inputs and local
transformations, adding value to the goods. Goods that dont cover these minimum requirements are
not entitled to the special treatment envisioned in the free trade area provisions.