Analysis of Recent International M & A Trends in Telecom Industry - A Case Study

Abstract

The corporate world aims at maximization of profits and wealth. One of the main objectives of any profit making enterprise is to maximize shareholders wealth. These objectives can be achieved by way of organic growth and/or inorganic growth. In value creation, M & A have assumed great importance which is in the form of inorganic growth. The telecom industry in the world has observed constant changes and accordingly the companies in this industry have changed their business models to achieve these objectives. In the recent past telecom industry is also facing challenges due to convergence issues. Value creation thus has become a challenge. Telecom Industry in India as well as all over the world has observed various M & A activities in the recent past. The objective was to find out the main objectives and driving forces in various M & As. For the purpose of our study we have relied on Case Study based approach and selected three cases. The telecom industry and its ecosystem consist of various players. We have selected cases based on a few criteria such as it is an international acquisition (i.e. in foreign countries), players in M & A are from the same ecosystem, period of observation is of two years i.e 2012 & 2013 and one of the companies is a leading handset manufacturer. On the International front also a few M & A have shown a specific trend and the same is observed and analysed in the cases of Motorola and Google, Microsoft and Nokia and Sony Ericsson and Sony Mobile Corporation. The study concludes with key findings and likely trend in the industry in the near future.

Keywords: Mergers & Acquisitions, Motorola-Nokia-Ericsson

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