Sony-MGM Merger

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//The given discussion paper is based on the process of merger between two Global Companies. In the first section of the discussion, the selection of the two Companies is done and the process of their merger is introduced in short. The discussion of this first section is done under the heading of introduction://

Introduction

For a long time, talks were on between Sony Pictures Entertainment (Japan) and Metro-Goldwyn-Mayer Inc. For seeking the possibility of a merger between the two organizations. It was clear to everyone that Sony would benefit a great deal from the film production studios and film libraries owned by the MGM. However, the arrangement for finance proved to be a major constraint in getting through with the deal.

It was believed that this merger would result in the generation of a business of about $3.69 billion in sales and a share of16.5 percent of the home video market. In addition to this, the merger would provide Sony with an extensive film library owned by MGM. It would also help Sony in its entertainment hardware business. As a result of this deal, Sony could revitalize its efforts in the direction of future technological developments in the entertainment business.

In order to arrange the financial requirements for the deal, Sony took the help of its financial partners, such as Texas Pacific Group, Providence Capital Inc. And others to understand the intrinsic nature of the deal. In fact, Allen & Co., Blackstone Group and Credit Suisse First Boston were given the responsibility of designing this merger (Wall Street skeptical of Sony as Lion tamer, 2008).

//After explaining the process of merger between the two firms namely Sony and MGM, in the next section of the discussion, I am ...