Marvel’s brand commands a 29% premium of its stock for Disney to acquire them giving Disney more brand popularity worldwide. The strategic reasons for mergers: * * Synergy – revenue growth and cost savings * Increase in Economic Growth. * Acquiring new Technology. * Acquiring licenses, patents and procedures * Globalization * Capacity Reduction * Familiarity between organizations * Increase Marketing and management capabilities. * Increases market share, customer segments and customer base. * Reducing the competition * Deregulations * To gain power and cash flows * Scaling Economies
The factors that are influential in implementing a merger: * Integration Plan: Combining corporate cultures, business processes, rewards system and hierarchy. * Strategic Fit: Organizations feel their strategic management is in line, creating a mutually beneficial synergy between both companies. * Rules & Regulations: Resistance from some employees may cause a problem and the organization should be prepared to manage the resistance. * Training & Development: The organization will incur training and development costs to align workers to the company’s quality level. Stakeholders: Stakeholders have to be on board with the merger for the implementation of the merger making sense for its stakeholders. * Risk: The organization assumes more risk when merging two companies together. The Walt Disney Company has been making many mergers to diversify their market and revenue streams. Overall, they have been successful by acquiring Pixar, abc, ESPN and now Marvel. The mergers have given Disney an increase in growth, value, and competitive advantage by strategically acquiring organizations that expand their market.
The Term Paper on Analysis of statement that “acquiring foreign companies creates shareholder wealth and helps reduce many risks”
The above statement discusses risk reduction as a benefit of acquisitions. I will split the statement into two parts; one that discusses the reduction of risks through acquisitions, and the other which explains the creation of shareholder wealth through acquisitions. The first part of this statement can be explained through the various forms of risk that are reduced due to acquisitions. One ...
Disney should create a strategy for implementing the merger as it gets complicated with Marvel licensing to other production companies. This merger will widen the market for Disney creating value for the organization in the ever changing market. Disney’s experience and success in implementing mergers and benefiting from synergies gives the organization greater value for its stakeholders. Disney’s development and marketing is the strategic reason that they are interested in Marvel since they can make the lesser known characters become mainstream characters reducing risk.
Disney may have also acquired Marvel because Time Warner owns DC Comics and this may be a sign of a copy cat behavior. Marvel has substantial growth potential since they mainly license out their character to other entertainment companies and once those licenses expire Disney will have full control. As part of the merger strategy, Disney should get as much information about Marvel as they can, such as, finances, debts, legal and ethical issues, cultural environment before the merger. Moreover, Disney should review the risks and implement a post merger strategy to reap the benefits of the merger.