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Mergers & Acquisitions

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Dimitra Sp

on 5 February 2015

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Transcript of Mergers & Acquisitions

Mergers & Acquisitions
Benefits of M&A
Synergy => surplus power enables enhanced performance and cost efficiency.
Greater Value Generation
Reduced Cost (Economies of scale)
Stronger and more competitive company (competitive advantage)
Stronger business network
Diversification
Disadvantages M&A
Culture Clashes
Management problems
Brand Damage
Danger of Monopoly
Conclusion
Definitions:
Mergers
typically involve 2 relatively equal companies making the mutually beneficial decision to become a single legal company.
References:
En.aegeanair.com, (2014). Aegean Airlines | Questions and answers on the approval of the acquisition of Olympic air by the European Commission. [online] Available at: http://en.aegeanair.com/all-about-us/press-office/questions-and-answers-on-the-approval-of-the-acquisition-of-olympic-air-by-the-european-commission/ [Accessed 20 May. 2014].
Whatis.techtarget.com, (2014). What is mergers and acquisitions (M&A)? - Definition from WhatIs.com. [online] Available at: http://whatis.techtarget.com/definition/mergers-and-acquisitions-MA [Accessed 20 May. 2014]..
Case study :
Airline carriers:
Aegean Airlines
Olympic Airlines
Structure:
Definition of Mergers & Aquisitions (M&A)
Why do companies make mergers?
Advantages
Disadvantages
Risk of Monopoly
Aegean & Olympic airlines
Conclusion
References
The new company
Acquisitions
usually involve a larger company absorbing a smaller company, sometimes against the will of the smaller company’s management.
airline in private sector
Star Alliance Member
Attempted merger with Olympic Air (2009)
Why do companies merge ?
Olympic Air is now 100% owned by Aegean Airlines, which bought the company for €72m
public airline
Greek Economic Crisis
The Greek Goventment seeks investors to sell it
The EU Commission
blocked
the merger, citing anti-competition concerns (26/01/11)
After the acquisition, Olympic Air will become a subsidiary of the listed AEGEAN.
The total fleet after the acquisition will consist of 45 aircrafts.
The 2 brands and logos of the companies will remain intact with each one retaining distinct fleet and flight opperations
The acquisition will allow to increase further growth, contributing substantially to the development of Greek Tourism and the Economy.
09/10/2013: EU Commission
approves
acquisition of Greek airline Olympic Air by Aegean Airlines
"It is clear that, due to the on-going Greek crisis and given Olympic's own very difficult financial situation, Olympic would be forced to leave the market soon in any event. Therefore we approved the merger because it has no additional negative effect on competition."
Olympic is much smaller than in 2011
Olympic is 'highly unlikely to become profitable under any business plan
Why did the Commission accept this aquisition?
Acquisition raises no competition concerns on international routes
[A] [B] ===> [AB]
[A] [b] ===> [A]
According to Aegean:
All companies come to decisions for M&A because they hope they can earn more
who is the winner?
In case of mergers, there is no ovious winner, because everything depends on the deal of the 2 companies
the case of acquisitions, is he concept : the
big
fish eat the
little
ones
Full transcript