Takeover Strategy When Smaller Companies attempt to to acquire larger competitor

This topic contains 2 replies, has 3 voices, and was last updated by  Silman Ondrej Dia 11 months, 2 weeks ago.

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • #92272

    Melvin Ashley
    Participant

    What is the ideal offensive strategy for when a smaller company attempts to take over a larger competitor? I’m thinking about when Porsche attempted to takeover Volkswagen and lost. What should Porsche have done differently in order takeover VW?

    #92956

    Jubran Alshahrani
    Participant

    This is too wide of a question and has many answers. One way of doing so is analyze the equity ownership and understand their drive. This can lead to a move from the investors towards the transaction. Acquiring a good share of equity and lead to investor activism. carl Icahn has done this a number of times and has pushed for many deals to happen. Having an investor that champion the transaction will help but requires some patience and persistence.

    #93533

    Silman Ondrej Dia
    Participant

    Hi there,
    In reference to Porsche’s attempt to take over Volkswagen I believe it was overall a very cleaver plan* for a hostile takeover put in place by Wendelin Wiedeking CEO & Holger Härter CFO, which would have surely worked if the 2008 financial crisis didn’t happen. The credit crunch prevented Porsche to reach the 75% mark, which under German law would have given them full control over the company and access its cash flow, which was “the true essence of deal: domination and profit transfer.” Porsche was just 0,9% short of reaching they goal!
    Timing was the main reason they didn’t achieve the hostile takeover, and perhaps the only thing they should have done differently was to have a contingency plan against a financial crisis! Tough luck.

    * The plan consisted of purchasing VW stocks including the use of call options. In turn the profits generated by such operation financed the actual share purchase.

    Reference:

    Porsche and VW: What the Hell Happened?


    https://www.spiegel.de/international/business/david-to-merge-with-goliath-porsche-fails-to-swallow-vw-a-623423.html
    https://www.ft.com/content/ad782326-ed02-11e5-888e-2eadd5fbc4a4

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.

Loading.. Please wait