Ravi Madhavan's A&D Blog

Welcome to my Acquisitions & Divestment blog!

Welcome to my Acquisitions & Divestment blog, which is primarily meant for the community of Katz students and ex-students (MBA, EMBA and Exec Education) who have taken my Acquisitions & Divestment course over the last few years. Given the amount of ongoing interest in M&A, I hope this will grow to be a communication platform for us to keep in touch and help each other keep abreast of new developments in the field. This blog will focus on the strategy and general management views of Acquisitions & Divestment (as opposed to the (technical) financial or legal aspects). I will post here links to M&A events, commentary and resources, as well as share observations about the changing landscape of M&A. Come back often and let me know how we can make this interesting and useful for everyone!

Integrating Skype

NYT's Technology section discusses the integration of Skype into Microsoft.

Google's challenges ahead with Motorola Mobility

Now that Google's acquisition of Motorola Mobility is formally complete, there's greater discussion of the challenges ahead - broadly, how to meld the relatively low-margin hardware business with Google's high-margin Search/ Advertising model. BusinessWeek takes an in-depth look.

Chinese FDI in the US

A corrective for the perception that China is taking over everything: this Columbia FDI perspective (the underlying Princeton report has details) suggests that Chinese FDI accounted for only 0.25% of total US FDI stock in 2010. 

Eaton buys Cooper Industries

In B-school strategy classes, the Cooper Industries company has been a mainstay case study for teaching about corporate strategy. Those discussions will now need a major update, as Eaton has acquired Cooper Industries for over $11B. BusinessWeek story here. A key feature of the deal for Eaton appears to be that the combined company will be domiciled in Ireland (which has low corporate taxes), which is where Cooper Industries is registered.

Milken Institute panel on M&A outlook

Here. 

Warren Buffett's media move

Interesting deal - in its second transaction in the media space within six months, Buffett's Berkshire Group bought a portfolio of 60+ newspaper properties from Media General. NYT story here. From what we know about Buffett, it's unlikely he's betting on creating value via a technology upgrade (e.g., by evolving the local newspapers into the world of "new media.") Berkshire Hathaway's acquisition criteria are listed here. Is this a "last iceman" strategy? Or merely a reflection of a personal bias? Excerpt from the same NYT story.

The billionaire has often reminisced about being a paperboy in his youth — a newspaper tossing competition featuring Mr. Buffett and his friend Bill Gates was one of the highlights of the investor meeting — and waxes nostalgic about the decline of newsprint.

 

Roundup

Lots of interesting stuff on the "airwaves" today, here's a selection:

NYT has summary graphics, based on Thomson Reuters data, of M&A activity in 2012 Q1: down 34% at $481B worldwide.

NYT DealBook's Deal Professor on how Google's Motorola Mobility buy is awaiting approval from China's anti-trust authorities.

WSJ conducts a scenario analysis on Greece's future in or out of the EU.

Private Equity explained

The private equity industry is fighting a PR war against all the negative publicity, this time with some educational outreach. The Private Equity Growth Capital Council tries to explain how private equity works, complete with cartoon video and a slide set.  

MetroPCS - T-Mobile

An analyst report on the the idea of MetroPCS merging with T-Mobile has the transparent title “Oh My, What an Ugly Baby,” writes WSJ's Deal Journal. 

One interesting deal and another potential one

Asahi to buy Japanese milk beverage company Calpis for $1.5B, NYT report here. A key driver is described as follows (excerpt):

Like other Japanese brewers, including Kirin, Orion, Sapporo and Suntory, Asahi is dealing with the challenges of an aging and shrinking population at home, which has led to declining beer sales in Japan. 

Some background about Japan's demographic challenge here. 

This morning, there was news about another interesting deal in the works - move theater chain AMC (owner of Loews cinemas) is reportedly taking to a Chinese buyer about a sale, which may be full or partial. NYT report here.