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Focus "and"

Author: ChenNing From: www.yourpaper.net Posted: 2009-11-21 20:12:50 Read:
[Abstract] market monopoly Focus Media (hereinafter referred Focus) blur into a strategic positioning, management mess troubled, but "do China's largest digital media group" has become the ambitious target audience. The quickest way is to mergers and acquisitions.
[Keywords] Focus Media M & Jason Jiang CGEN

Since the listing of Focus Media, led by Jason Jiang, a dazzling takeover battle. Focus 2007 showed a profit, in addition to the large-scale mergers and acquisitions, Focus in 2007 also acquired eight digital outdoor elevator Media 5, 10 mobile advertising company and six Internet advertising company. Focus "sale" is not only based on the 2006 Annual Report, disclosed in 2004, 2005, 2006, Focus total acquisition of 29 companies (including holding). In other words in the past four years, Focus invest a total of, the acquisition of more than 60 companies.
I can not help but ask, why Jason Jiang never tired of his acquisitions myth? Mergers and acquisitions to the audience what? The Focus because while? Whether such a scale mergers and acquisitions to a potential crisis Focus?
With these issues, I wrote this article, the main line of this article to Focus on December 10, 2007 acquisition of CGEN, talk about some superficial analysis and insights.

A, the basic concept of the M & A

Mergers and acquisitions (M & As) is a shorthand for the merger (MERGER) and acquisitions (ACQUISITION). The merger is in the role of the market mechanism, after the transfer of ownership of property rights trading, one or more businesses all or part of the control of owned by another company, the result is the legal personality of the merged enterprise disappear (merger) or the legal personality of the two companies disappear (new merger). ке a business acquisition is made by way of acquisition of shares or share control or management rights of one or more other enterprises, the result is acquired businesses have all the stock or shares of the target company (general offer) or only target enterprise a large part of the stock or shares to control the target company (control acquisition), or simply have less target company stock or shares to become one of its shareholders (shares acquisition). Acquisition does not make the loss of legal personality of the target company, which is the biggest difference of mergers and acquisitions.

Second, the M & A motive

The specific motivation mergers and acquisitions: management synergies, operating synergies, financial synergies, to achieve strategic restructuring, to carry out diversified business, get special assets, reduce agency costs. In this paper, I will not specific analyzes. ке In my opinion the following three reasons:

1. Pursuit of synergy effects
This is the most common motivation of mergers and acquisitions. Collaborative by nature can be divided into two types: (1) Static Collaborative (such as in a point in time reduce costs or increase revenue). Static Collaborative include: management of comprehensive utilization of resources; take advantage of each other's marketing and distribution network in order to increase revenue; collaborative procurement (to strengthen the bargaining power); economies of scale in production led to a reduction in costs; avoid duplication of production, research and development or other activities. Increase for some competitive pressure to lower prices, excess production capacity in the industry, the pursuit of the synergistic effect of the static important. (2) Dynamic Collaborative (such as strengthening innovation). The dynamic synergies may involve with complementary resources and skills to improve the innovation capacity of enterprises, and thus long-term positive impact on sales, market share and profits. The same time, played a vital role in the rapidly changing technology industry and innovation-driven industries, such as the information industry, the dynamic synergy.
Market forces
Mergers and acquisitions can reduce the competitors to increase market share and enhance their ability to control market environment and the long-term profitability. The benefits extension Dayton empirical studies have shown that the profit rate of change in large companies than small companies by market environment, the relatively small impact on the development of the industry changes and technological innovation, enterprise scale, stability and market forces among the three a close relationship.

3. Guarantee speed
M & A is the most important reason for enterprises to adopt. In accordance with the well-known American business historian Chandler exposition enterprises by accelerating inventory, sales, production speed, improve the efficiency in the use of funds and resources, reduce production costs, the so-called speed economy. Mergers and acquisitions can quickly get to the target company's production, sales, research and development capabilities, thus speeding up the flow of these resources in the production cycle, to get the speed of the economy, specific performance: (1) enterprises in foreign expansion, mergers and acquisitions usually achieve the desired goals The most rapid way. For example, if you enter the market timing is important, then the acquisition of an enterprise has a ready-made distribution network to establish a new sales organization more favorable than in the local; (2) to enter a market or a new technology too late the need to enhance the enterprise, mergers and acquisitions provide a quick catch up ways; (3) time pressure with a sense of urgency, especially in the fierce competition and rapidly changing technology industry, making enterprise for opportunities to make a quick response , grab the competitors to take action before it is more desirable; (4) At the same time, technology upgrades to accelerate product life cycles have become a major trend, new product diffusion through the new target market may face greater the risk of product upgrades, in this case, the enterprises to adopt the way of mergers and acquisitions to establish the same scale production capacity much faster than the new, and the risk in the controllable range.

Third, Focus Media M & Memorabilia

January 4, 2006, $ 39.6 million acquisition of the framework of media;
January 8, 2006, the $ 325 million merger mob;
June 20, 2006, $ 30 million acquisition of Dotad;
August 31, 2006, the acquisition of cinema advertising company ACL;
March 1, 2007, the $ 225 million acquisition of the good Lord;
December 10, 2007, $ 168.4 million cash acquisition of CGEN.

Focus what

What is the Focus? This look is simple, in fact, very complex.
July 14, 2005, Focus media in the promotion of its main investors 3i Group, Draper Fisher Jurvetson, Softbank, visit the U.S. Nasdaq stock market, the total amount of financing will reach $ 171.7 million, hit Chinese stocks in Nasdaq most of the financing scale. Focus Media (Focus Media), the creator of the living area media group, is targeting a specific audience ethnic media, this part of the audience can clearly describe or define. Focus Media's owned commercial buildings video media store terminal video media, apartment elevator plane media (the framework of the media), outdoor large LED color screen media, mobile phone wireless advertising media, Internet advertising platform (Allyes advertising network), points all the straight-efficiency business DM The media and database marketing channels for the characteristics of the audience and each other organically integrated media network. In fact, the audience in the eyes of many people is synonymous with LCD and buildings television.
Focus building advertising started two years ago to expand the site to the Internet and mobile phones. Since then, Jason Jiang said, his focus gradually shifted from building advertising super sales, which will spend more time thinking about a new business. "I used to be 50% of the time on the digitized outdoor (business), 50% of the time on the new business, can now invest 100% of the time to a new business up."
Focus business is now divided into three blocks: the first piece is a digitized outdoor digital screen to create a variety of outdoor video; second block, the Internet media; The third block is the field of mobile wireless as a whole to become a full- for digital media. " Both 2007 revenue is expected to account for 35% -40% of the total revenue of the Focus. It is reported that Jason Jiang plan is now listed business, the IPO will also integrate the two businesses are the online advertising business and mobile media business, the former including iResearch Creation miracle Shanghai River Media Advertising Company . At this point, the "digital media" Focus proposed change, is not a simple concept, but marks the complete transformation of the Focus.
December 10, 2007, Jason Jiang semi Road robbery under CGEN listed roadshow has been completed, in accordance with the agreement of Focus Media, to $ 168.4 million in cash acquisitions store digital advertising network operators CGEN addition, if CGEN within 24 months after the completion of the transaction to achieve specific revenue targets, Focus Media will pay up to $ 181.6 million in cash and stock. Through this transaction, Focus Media will further expand the coverage of its digital advertising network in China's large supermarket chains.
M & A is a double-edged sword, the probability of failure is much greater than the success. Lenovo IBM PC, mergers and acquisitions, capital markets bearish on it a market value in the announcement date of evaporation of HK $ 700 million. By comparison, Focus, every large-scale acquisition, but had to obtain the approval of the market, announced the acquisition of mob Focus stock price one day surged 14.6% acquisition of the largest Internet advertising agency Allyes day's share price rose 5.6%, this the acquisition CGEN again promote the share price rose by 3.71%. Mergers and acquisitions for the mob makes the Focus shares rise from more than $ 30 to more than $ 50, and Jason Jiang also able to get away from the beleaguered competition, began to consider the strategy and mergers and acquisitions. Successful mergers and acquisitions to promote Focus shares rose high price, in turn, enhance the M & Focus Focus in mergers and acquisitions in the extensive use of additional shares rather than cash. Listed at the beginning of July 2005, Focus Media's market capitalization of just $ 700 million in just two years, Focus funds include stock issuance of more than 1.2 billion U.S. dollars for the acquisition. Jason Jiang again and again generous acquisitions Why always promote the company's market capitalization growth point "gold pen? Fifth, in line with the strategic acquisition
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