« MERGERS AND ACQUISITIONS»

1. What do you understand by these terms?

1 a takeover/acquisition
2 a merger
3 a joint venture

Think of three reasons why one company might wish to take over another company.

What do you think the advantages and disadvantages of acquisitions may be for a company’s:

1. employees?
2. customers?
3. suppliers?
4. shareholders?
5. products and services?
2. Match the terms (1-6) to the definitions (a-f).

money risked or invested in a

1 joint venture a) company
tw o or more companies joining to
2 MBO (management buyout) b) form a
larger company
3 merger
c) offer money for shares in a company
4 takeover/acquisition when a company's top executives buy
d) the
5 bid company they work for
a business activity in which two or
6 stake e) more
companies have invested together

f) getting control of a company by buying over

50% of its shares

3. Circle the noun which forms a word partnership with each verb.

1 take a stake I a bid / an acquisition

2 make a merger / a stake / a bid

3 launch a bid / a share / a stake

4 target a company I a bid I a takeover

5 set up a share I a joint venture / a stake

6 make a merger I a joint venture j an acquisition

7 reject a bid / a stake I a share

8 sell a merger I a bid / a stake

4. In groups, look at the table below and answer these questions
1 What do the companies in column A do?
2 Match the company in column A to the company that it acquired in column B.
Feel free to guess.
3 What do you think all the companies in column B have in common?
A B
Danone Ben and Jerry's
L'Oreal Stonyfield Yogurt
Colgate-Palmolive The Body Shop
Unilever Aveda
Cadbury Schweppes Green and Black's
Estee Lauder Tom's o f Maine

Read the rest of the article and say if these statements are true or false.

1 Sean Greenwood is more positive about the takeover of Ben and Jerry's than Jerry Greenfield and
Kevin Ranney.
2 Large companies acquire small companies to help them with innovation.
3 The majority of customers shop elsewhere when their favourite brands have been taken over.
4 Ben and Jerry's shares were doing well just before Unilever bought them.
5 Ben and Jerry's are using more freetrade ingredients than before the acquisition.
Answer these questions.
1 What do large companies have that smaller companies don't?
2 What problems did Ben and Jerry's have just after the acquisition?
Complete the paragraph below with the words in the box.

conglomerate corporations multinational partnership subsidiary

Toshiba is a large ...............1that has acquired several............... J engaged in different industries. It is also
a ...............3 as it has offices in many different countries. Toshiba recently formed a ...............with United
Parcel Services to design a more efficient repair processfor laptop computers. In 1987, Toshiba Machine,
a ............... 5 of Toshiba, was accused of selling parts used to produce submarine propellers to the Soviet
Union.
GREEN TARGETS
It ain’t easy being green these days - especially if y o u ’re an independent green business.
The list of smaller, green companies being swallowed up by global conglomerates is growing in both
prestige and numbers: responsible ice-cream producer Ben and Jerry's, now owned by Unilever; organic
yogurt maker Stonyfield Yogurt, now in partnership with Danone; alternative beauty companies The
Body Shop and Aveda, now owned by L'Oreal and Estee Lauder io respectively; organic chocolatier
Green and Black's, now owned by Cadbury Schweppes; Tom’s of Maine toothpaste, now owned by
Colgate-Palmolive; personal-care company Burt's Bees, acquired by Clorox in November 2007; and
Husky Injection Molding Systems, acquired in December 2007 by Onex Corporation for $960 million.
It's not hard to see why small companies are vulnerable - multinationals can offer increased
distribution, access to more markets, and most of all, cold, hard cash. And large corporations often find it
easier to acquire than to innovate.
Consumers are at the very least surprised to discover that their favourite brands have become mere
subsidiaries within a large multinational. A recent poll by the website Treehugger.com (ironically, this
once-independent site is now owned by the Discovery Channel) found that 35 per cent of consumers take
their business elsewhere when corporations acquire their once-revered brands.
Skeptics of responsible retailing can easily suggest that small companies have simply reached their
expiration date - unfortunate hippie victims of corporate Darwinism. But these partnerships can help bring
ethical activities into the ma Jerry's. "We could have had a lot of instream. "We're fortunate," says Sean
Greenwood, spokesperson for Ben and businesses that could have bought us and [closed us down]. But
they didn't do that. And I applaud them for that and for recognizing and understanding that that there's a
value in keeping the folks who are so trying to hold on to what's really important: the essence of Ben and
Jerry's.”
In April 2000, the Anglo-Dutch Unilever NV announced it would buy flagging Ben and Jerry's stocks for
$43.50 a share, a large premium over the previous day's closing price of $34.93. Even though the initial
takeover caused factory closings, job losses, and management changes, Greenwood says that his company
has helped change Unilever.
"I have no responsibility and no authority in the company," he said. “I have my good name. I have an
ability to influence things I want to, and to not be interested in things I'm not interested in. That's the
extent of my role." He went on to add, though, that influence does exist. “ I was skeptical about this
supposed ‘transport of values' from Ben and Jerry's to Unilever, but it has happened to some degree,"
Greenfield observed.
5. Choose the correct verb forms.
1 We will have paid /will be paying back the loan by December.
2 I will be/w ill have been here for three years next May.
3 Next year, she will be working/will have worked in our Tokyo office.
4 We will be holding/w ill have held a meeting soon.
5 Don't phone me tomorrow because I'll be working /work on the bid all morning.
6 We will be offering /will have offered a special discount from January 1st.
7 By the end of next year, we will be launching/will have launched six new products in three years.
8 This time next year, we will be enjoying/will have enjoyed the results of the merger.

6. Work in pairs. Say what you really think about the likelihood of these things happening.
• a stock-market crash next year
• Microsoft merging with Apple
• the majority of managers being women
• Brazil, Russia, China and India becoming the major world economies
• the World Wide Web having serious problems

7. Work in pairs. Make predictions about your company, your country or yourself. Use as many
forms from the Language review box above as possible. You may also find these phrases useful.
In my lifetime, ... Over the next decade, ...
Before long, ... By this time next year, ...
In the near future, ... By the end of this century,...
In the next ... years, ... Sometime in the next decade/century,...
8. You are the Managing Director of Eastman Property. Your company intends to buy one of these
businesses located in your country:
• a travel agency
• a shopping mall
• a business equipment store
• a cinema complex
• a sports and leisure centre.
Choose one of the businesses. Make a presentation to a group of investors explaining why you wish to
buy the business, and what plans you have for its future development.