Mergers & Acquisitions

Please read the article and case study discussion at (Links to an external site.) and the discussion of the two mergers discussed and the explanation of what happened. Please provide a summary of what you learned and find another similar merger through independent research that subsequently turned out to be less lucrative than anticipated. Discuss what went wrong with the merger you found, the companies involved, and what could have been done to have avoided the problems….i.e. whether the deal shouldn\’t have been done at all, whether management made mistakes in merger integration, or some other problem.

Additional Information to explain this transaction:

German car maker BMW AG completed the pull-out from its loss-making British Rover subsidiary on Wednesday, selling Land Rover to Ford Motor Co and sweetening the deal by agreeing to take on the unit\’s debt.

BMW said it would bear all of Land Rover\’s long-term debt as part of the three billion euro ($2.73 billion) sale. It declined to give the value of the debt, though media reports have said it could be as high as one billion marks ($465 million).

The sale comes two weeks after BMW sold Rover Cars to UK consortium Phoenix for a token 10 pounds and threw in a 500 million pound ($737 million) loan to ease its exit.

Ford will take over production of the four-wheel drive Range Rover, Discovery, Freelander and Defender models at Land Rover\’s Solihull manufacturing plant near Birmingham on June 30. It will also take charge of the Gaydon engineering and design centre.

The world\’s second-biggest car maker, which already owns the cherished British Jaguar and Aston Martin brands, will also take over Land Rover\’s dealer network and the British Motor Industry Heritage Centre, BMW said in a statement.

The agreement puts Ford in charge of 13,000 Land Rover workers. Earlier this month the company said it would end production of its own brand cars at its Dagenham plant, near London, from the first quarter of 2002.

BMW shares were up 1.9 percent in afternoon trade on the Frankfurt bourse at 31.30 euros. The benchmark DAX share index was down one percent.