I need help on the following parts on this assignment. I have very little knowledge of M&A.
Conduct research on the M&A you have selected: the selected company is AT&T. (at least 1300 words)
a. Examine the underlying motives that the acquiring company used to launch the M&A activity.
b. Determine the financing instruments used for the M&A strategy employed (debt, equity, others).
c. Discuss the impact on the M&A in terms of human capital and the assimilation of differing organizational cultures.
d. Discuss any relevant governance or ethical issues that the M&A activity faced during its formative term? Discuss the specifics and how this issue was handled?
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AT&T and Bell South Merger:
Examine the underlying motives that the acquiring company used to launch the M&A activity.
There were numerous underlying motives for AT&T to acquire and merge BellSouth Corporation. One of the major rationale for this merger was to streamline the ownership and operations of Cingular wireless, which was jointly owned by Bellsouth and AT&T prior to this merger. Under a single and new ownership, Cingular would be a more innovative and efficient corporation which will improve the services of the company and benefit the customers.
The merger resulted in combining the Cingular, BellSouth and AT&T networks into a single fully integrated wireless and wireline Internet Protocol network offering a full range of advanced solutions.
As a result, the combined company will be better able to speed the convergence of new and improved services for consumers and businesses, and embrace the industry's shift to Internet Protocol network-based technologies.
Another major rationale for the merger was potential synergies that would arise out of the merger. The merger was expected to yield Substantial financial benefits for stockholders of both companies; an expected net present value of $18 billion in synergies resulting from a more than $2 billion annual run rate in synergies expected in 2008, growing to $3 billion in 2010.
The cost savings will principally come from workforce reduction and from reduced advertising expenses as the three brands are merged into one entity. The rest of the savings would come from combining the backbone network and information-technology operations of the two companies.
Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP television networks and similar services as a result of AT&T's groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouth's extensive deployment of fiber networks for DSL and other broadband services.
Business customers in the southeastern United States and the rest of the country stand to benefit from the expertise and innovation of AT&T Labs, as well as the combination of AT&T's state-of-the-art national and international networks and advanced services with BellSouth's local exchange and broadband distribution platforms and expertise.
The combined company will have greater ...
This solution researches and discusses the merger in 1419 words.