What is the French and German plan to create bi-national champions really about? 6 страница

Exercise 1. Translate the following into Russian.

a boom in mergers and acquisitions; to pass management-friendly anti-takeover laws; to charge in a bidding war as a white knight; mergers; to employ a poison pill; a soaring target company's price; to be threatened by a hostile bid; to hinder attempts to takeover companies; to spurn an attractive offer; to break up a company; to unwind cross-shareholdings; a staggered board of directors

Exercise 2. Translate the following into English.

помочь компании выйти из затруднения; средства защиты при попытке враждебного поглощения; стать объектом поглощения; вызвать рост цены на акции; закон о компаниях; взаимное участие в капитале компаний; сделать предложение о враждебном поглощении компании; корпоративные «налетчики»; существенно изменить состав совета директоров

• Text 2

Hold My Hand

Takeovers are certainly changing the corporate landscape. But alliances may be altering it even more

BUY, buy, buy. All around companies seem to be snapping each other up. AT& T wants to buy MediaOne; Deutsche Telekom and Telecom Italia plan to coalesce; Hoechst and Rhone-Poulenc have agreed, after much dithering, to be spliced. Some of the current crop of marriage proposals may stop short of the altar; others, such as the mooted deal between Texaco and Chevron, two oil firms, may come to grief. But feverish though the current merger activity is a more important change may be in the scale and complexity of alliances.

In Silicon Valley and Hollywood, alliances are old hat: in a sense, almost every movie is in ad-hoc alliance, as is the development of every new computer chip. But, as in so much else, these two fashionable places are proving models for older industries.

Mergers, like marriages, can be legally defined and therefore readily counted. Alliances are more like love affairs: they take many forms, may be transient or lasting, and live beyond the easy reach of statisticians.

However, the numbers represent just one part of the picture. Relying on outsiders for more than a fifth of your sales represents a fairly big dent in many companies' definition of what they are: it erodes corporate boundaries and forces imperious types to co­operate with one another. Thus AT& Ts takeover of MediaOne may in the long term prove less remarkable and complicated than the alliance it has simultaneously formed with Microsoft to deliver broadband services over cable-television networks.

The degree to which alliances transform companies varies with the type of alliance. The most common reason, still, is to find a way into a foreign market. Indeed, the need to expand abroad helps to explain why alliances have long been more common in Europe and Asia, which between them account for half the world's total, than in the United States, which now accounts for around a third. Outside the United States, nearly all alliances are cross-border ones.

Worse, this need to find an ally is often driven by governments rather than by commercial logic. The number of alliances soared partly because there are usually national barriers to foreign ownership.

The huge Star Alliance, which includes Lufthansa and United Airlines, began as a series of loose arrangements to share codes and direct passengers to partners' flights; now it is beginning to look more like a quasi-merger, with shared executive lounges and pooled maintenance facilities.

Such arrangements look less efficient than full-blown mergers: were it one company, the Star Alliance could save a lot in managerial overheads.

The same applies to many telecoms alliances. Pat Gallagher, managing director for Europe of Britain's ВТ says that the telecoms giant formed lots of joint ventures in the early 1990s with foreign firms " because we couldn't do an acquisition." But this was often a policy of second-best. " Is it easier to run a 100 % owned company? " he asks rhetorically. " Of course it is." However, even when they cross borders, many alliances are not merely frustrated mergers, but deliberate attempts to change direction.

In industries where local knowledge is particularly important, such as retailing, cross-border partnerships still seem essential. Having watched several of its peers make expensive mistakes trying to buy stores or going it alone, Britain's Tesco has begun its push into South Korea arm-in-arm with Samsung. Wal-Mart is a past master at learning from local partners. It started working with Cifra in Mexico as long ago as 1991 before taking control of the local retailer two years ago.

This implies that alliances may be mere stepping-stones. In fact, once one looks beyond the cross-border deals, a different picture begins to emerge — much closer to the endlessly forming and re-forming webs of Silicon Valley and Hollywood. An increasing number of alliances are not about geographic areas but managerial ones — and particularly about defining where firms begin and end. Typically a firm will focus on one or two core competences, and outsource other things to its allies. Sometimes this merely means sharing resources on a big project.

Alliances seem even more useful when companies are not potential rivals at all, but firms that are at different points on the same value chain. If a company wants access to another firm's knowledge in a particular area, argues Marcus Alexander, a director of Britain's Ashridge Strategic Management Centre, an acquisition can be a disaster. Buying your customer also means running the risk of losing other customers.

Indeed, for all the talk about " long-term strategic partners, " two things seem to be pushing big companies towards an ever more promiscuous lifestyle, with multiple partners. The first is that many of the people whose brainpower the big firms most need simply do not want to work for them. The second reason is the speed of change. Alliances give you the chance to move on if something better comes along.

On paper, all this knowledge-sharing sounds wonderfully creative. In practice, it can be hell. Buy another company, and rationalisation is simply a matter of aiming the hatchet in the right place. Running an alliance, says Firoz Rasul of Ballard Power Systems, a Canadian pioneer of fuel cells, is " like getting married. You have to understand each other's expectations. And even then, you have to work very hard to keep the initial excitement going."

When the partners are corporate titans, such as Bill Gates of Microsoft or Michael Armstrong of AT& T, there is obviously plenty of room for disagreement. But things are not much easier when partners are small. Ballard has alliances with two giants of the car industry, Ford and DaimlerChrysler. " We're like a mouse sleeping with two elephants, " says Mr Rasul. In Silicon Valley plenty of people argue that if you get into bed with a company like Microsoft or Intel, you will get squashed.

In this context, trust seems to matter much more than bits of paper. Peter Boot, an alliance expert, argues that trust must be present at every level. " You have to be disposed towards the most benign interpretation of the strange signals you get from time to time, " he says. " You have to interpret them innocently."

More than anything this requires leg-work by the managers concerned. If nothing else, the new fashion for alliances should prove a boon to restaurants all over the world.

The Economist

Notes

1. But feverish though the current merger activity is, a more important change may be in the scale and complexity of alliances. - В данном предложении имеет место инверсия, используемая для усиления значения слова feverish. Без инверсии предложение выглядело бы следующим образом:

But though the current merger activity is feverish, a more important change may be in the scale and complexity of alliances.

2. ad hoc — (лат) на данный случай; ad hoc committee — специальный комитет; ad hoc(c)ery, ad hockery — решения, постановления, принятые на данный случай; договоренности, достигнутые на данный случай

3.broadband — широкополосный (в кабельной оптике)

Useful Words and Phrases

Exercise 1.

Articles about company relationship often use the language of courtship, marriage and divorce. Read the above article and find examples of such language of personal relationship describing alliances and mergers.

Watch the video The Merger is off.

Exercise 2. Read the following text.

Types of Mergers

Economists classifies mergers into four groups. (1) horizontal, (2) vertical, (3) congeneric, and (4) conglomerate.

A horizontal merger occurs when one firm combines with another in the same line of business - for example, when one widget manufacturer acquires another, or one retail food chain mergers with a second.

An example of a vertical merger is a steel producer's acquisition of one of its own suppliers, such as an iron or coal mining firm, or an oil producer's acquisition of a company which uses its products, such as a petrochemical firm.

'Congeneric' means " allied in nature or action"; hence, a congeneric merger involves related enterprises but not producers of the same product or firms in a producer-supplier relationship.

A conglomerate merger occurs when unrelated enerprises combine.

Operating economies (and also anticompetitive effects) are at least partially dependent on the type of merger involved. Vertical and horizontal mergers generally provide the greatest synergistic operating benefits, but they are also the ones most likely to be attacked by the government

Explain the word combinations in English and translate them into Russian.

Give your own examples of the biggest mergers and analyse them using the above terminology.

Exercise 3. Translate the following into English.

давать предвзятое толкование; оказаться благом для страхового бизнеса; быть готовым проявлять терпение при выработке решения; сверхкрупные корпорации; получить доступ к информации о клиентах; обмен информацией; объединять ресурсы при работе над крупным проектом; стирать границы между корпорациями; ТНК в полном смысле этого слова; добиться экономии накладных расходов; попытка приобрести компанию

Exercise 4. Translate the following extracts paying attention to the attribute structures.

1.But while Mr. Kilts relied on extensive research to identify unsatisfied consumer needs, Gilette traditionally adhered to an " if we build it, they will come" strategy. Consumers might not know they needed better shave, the theory went, but once they had tried a superior Gilette system they would " trade up" and pay premium for the invention.

2.Klein, the author of the book about AOL and Time Warner ill-fated merger, is effective in depicting the culture clash between the arrogant AOLers and staid Time Warnerites that ultimately rocked the merger. Ideas that AOL saw as forging synergies were repeatedly shot down by the Time Warner side, which seemed intent on demonstrating that it had its own way of doing things. The oil-and-water mismatch between the companies played out in the corner suites, too. Klein has little inside dope on what took place - perhaps because his sources were mainly middle managers - but he does recount the dramatic and rapid unraveling of the company's top management. Recriminations were common as AOLTimeWamer's outlook deteriorated in the soft economy.

3. The narrative picks up speed about halfway through, when the author begins exploring the business practices of AOL chief deal-maker David Colburn, who was ousted last summer during the accounting scandal. Colbum, who Klein says affected a grizzled, rumpled " I-don't-care-what-the-hell-you-think manner of dress, " came to be feared in the dotcom world as a take-no-prisoners negotiator. He extracted onerous terms from fledgling Web startups, who felt they had to advertise on AOL if they were to have any credibility on Wall Street.

Exercise 5. Translate the text into Russian orally.

A Challenge From the Nimble Newcomers

A new model of international companies is emerging that is driven by networks, global links and adaptability

In the debate over globalisation, large multinational corporations, especially those from the US, European and Japanese origin, are often portrayed as omnipotent villains.

But these companies arc themselves facing a serious challenge from a new type of business, according to John Mathews, professor of management at the Macquarie Graduate School of Management in

Sydney, Australia.

In Dragon Multinational: A New Model for Global Growth, he examines some of the companies that have emerged outside the US-Europe-Japan triad over the past decade. " Periphery" companies, such as Taiwan-based Acer, Mexico's Cemex and Indian-based steel company Ispat International, have used novel organisational structures to establish strong global positions quickly. In fact. Prof Mathews points out, for such latecomer companies, organisational innovation is not so much an option as a necessity.

These companies are a far cry from the traditional structure, based on a corporate headquarters that strictly controls subsidiaries around the world. The new companies have a networked character and, because of that, they have been able to take advantage of the opportunities presented by all the links of the global economy.

Prof Mathews points out that these companies are not based on a new piece of technology or a new process, even though they are adept at using net-based systems as part of their accelerated internationalisation. They are defined by the decentralisation of their structure and by the fact that they were " born global, " with an eye on the international marketplace from inception. Old-style companies tend to look overseas only when they have outgrown home markets.

In this framework, the central office acts as a coordinator rather than a controller. The network is held together by common technology, strategic goals and attitudes. Stan Shih, head of the Acer group, describes the new multinational form by using the Chinese characters meaning " circle of dragons with no leading dragon."

The picture that emerges goes against the grain of much of the globalisation debate. That debate tends to present globalisation as driven by a handful of monolithic global companies, working to create a uniform world in their image. But those traditional companies are going to have to struggle to keep up with more nimble cell-based groups, Prof Mathews believes. The command-and-control structure is, he says, simply not suitable for the emerging global economy.

Is the argument convincing? Certainly, there are difficulties with the model that Mathews describes The cellular nature of the group creates problems with raising capital externally, for example. Another issue is that most of these companies are led by a particularly competent and visionary individual; how much of each company's success can be attributed to the leader is an open question.

Nevertheless, it is important food for thought, especially for anyone who wants a new perspective on the arguments about globalisation. One suspects that there is still a good deal of life in the model of die hierarchy-based company — but Dragon Multinational makes the case that serious alternatives are emerging.

The Financial Times

Exercise 6. Translate the text into Russian orally.

Limited Appeal

One giant step across Europe may find few imitators

IТ IS a grand title with a grand idea behind it. The idea of a Societas Europaea (SE), a company based and regulated in the European Union as a whole, rather than a single nation, has been around for at least 30 years. But it was not until September 11th this year that Allianz, Europe's biggest insurer, became the first big company to opt for pan-European status, announcing the move as part of a merger and business re-structuring. The legal groundwork for SE status was put in place only in October last year with the passage of EU legislation which, in theory, allows this new animal to operate seamlessly across the 28 countries of the European Economic Area (the EU and three neighbouring countries).

But there has hardly been a rush to sign up: only a handful of firms, headed by Strabag, an Austrian road-builder, have done so. One reason is continued uncertainty about tax treatment and aspects of corporate governance, as well as the slowness of some European countries to adapt their national laws. Moreover, for smaller European firms, setting up a limited company under British law is cheaper than opting for SE-status - and arguably allows the same freedoms.

Allianz decided on the SE structure as the best way to take over and integrate RAS, a 55.4%-owned insurance subsidiary in Italy, into its other European businesses. By creating a European company, and making an offer in Italy for the balance of RAS shares, Allianz avoids the irksome task of squeezing out reluctant shareholders at a later date - which it would have to do under German takeover law.

The Economist

Exercise 7. Translate the text into English in writing.

Коркунов и Риттер

Российский производитель дорогих конфет и немецкая компания, выпускающая элитный плиточный шоколад, создали альянс

На шоколадном рынке появилось российско-немецкое предприятие. Одинцовская кондитерская фабрика, принадлежащая предпринимателю Андрею Коркунову, и немецкая компания «Альфред Риттер Гмбх & Ко.» объявили о создании альянса. Эксперты оценивают союз как перспективный. «Этот шаг усилит позиции обоих участников, - полагает Ирина Седова, менеджер кондитерских проектов консалтинговой компании «Бизнесе Аналитика». - «Риттер» начинает выпуск своей продукции в России, а «Коркунов» получает инвестиции для расширения производства». И все логично, так как союзники работают на разных сегментах рынка шоколада: немцы - в нише шоколадных плиток, а «Коркунов» - в нише конфет в коробках.

Одинцовская кондитерская фабрика уже успела занять достойные позиции на рынке шоколадных конфет, на фоне именитых конкурентов - таких, как столичный «Красный Октябрь» с его вековыми традициями и швейцарская компания «Нестле», обосновавшаяся на куйбышевской фабрике «Россия». Причин для такого успеха несколько. Во-первых, компании повезло с моментом выхода на рынок. До августовского кризиса ниша элитных шоколадных конфет, на которую претендовал Андрей Коркунов, была полностью занята западными компаниями. Но кризис до того напугал иностранцев, что те оставили поле битвы. И появившаяся продукция Коркунова оказалась единственной в дорогом сегменте. Во-вторых, на российском рынке шоколада еще не было именных торговых марок. Надпись «А. Коркунов» на конфетных коробках резко выделяла одинцовскую продукцию на фоне «ассорти» разных фабрик и придавала ей имидж немассового продукта.

Однако немассовость продукта имеет свои недостатки: объемы продаж не позволяют получить достаточных финансовых ресурсов для расширения производства. А между тем спрос на одинцовские конфеты растет быстрее предложения, особенно в регионах: по данным компании, при нынешних мощностях она способна удовлетворить лишь 60% заявок региональных дистрибьюторов.

Так что «Альфред Риттер и Ко.» появился со своим инвестиционным предложением очень вовремя. «Благодаря сотрудничеству с «Риттером», - говорит Андрей Коркунов, -мы сможем расширить свою долю на региональных рынках до двадцати пяти процентов. Кроме того, это позволит нам увеличить объемы экспорта. Например, уже появилась возможность прорыва на рынки Канады и США, нужно только увеличить производство».

Всего в совместный проект будет вложено 20 млн долларов, половина из которых - германские. В итоге мощность производства увеличиться до 22 тысяч шоколадной продукции в год. В результате оборот Одинцовской фабрики вырастет с 50 млн долларов до 100 млн в будущем. Коркунов не исключает и возможности продвижения своей продукции в Германию, для чего ему пригодятся наработанные связи «Риттер».

Анастасия Матвеева

Эксперт

Exercise 8. Translate the following texts orally.

Text 1

French Twist?

IN THIS summer of corporate love, the unwanted embrace of Pechiney, a French aluminium company, by Alcan, its Canadian rival, could become a thorny romance.

Alcan's offer recalls a friendly menage a trots attempted in 1999 between Alcan, Pechiney and Alusuisse of Switzerland, which was rudely interrupted by offended European antitrust officials. Even so, Alcan went ahead with the purchase of Alusuisse.

Will this new, hostile attempt to complete the earlier threesome - thereby creating an aluminium giant to rival America's Alcoa - fare any better? Pechiney's board has rejected Alcan's offer as much too low, and is said to be seeking an alternative " white knight" buyer.

On its face, Alcan's pursuit of Pechiney makes sense. Along with the economy, the aluminium business has been in a slump; consolidation is in order.

Alcan has yet to raise its bid, but is expected to do so. It has been playing to French pride, and to French unions' aversion to job cuts. Full-page ads in Le Figaro argue for the deal by highlighting Alcan's long history in France and the Quebecois firm's " francophone culture." So how will the EU's antitrust watch dogs respond this time? In the years since Alcan's 1999 bid, the team headed by the competition commissioner, has been buffeted by a series of successful legal challenges to its merger-blocking decisions.

In one case, the European Court of First Instance declared baldly that the European Commission's merger analysis was " vitiated by a series of errors of assessment." Whether this will be enough to make it go easy on today's deals remains to be seen. Alec Burnside of Linklaters, a law firm, thinks that the commission is likely " to bounce back and show that the system still has teeth."

Already, it is looking hard at a bid by GE, which it once stopped from buying Honeywell, for Instrumentarium, a Finnish medical-equipment maker. The commission will certainly worry about the risk of collusion in a consolidated aluminium industry — a realistic fear in an industry already more integrated than for other metals, says Magnus Ericsson of Raw Materials Group, a consultancy. On the other hand, Alcan has learned from its earlier rebuff. It has come up with a plan to shed assets in Germany to pacify the commission.

Moreover, its bid will be helped by the continuing pain in the industry, deriving in part from growing competition from aluminium suppliers in China and Russia. This new competition makes it harder to believe that a merged firm would wield excessive market power.

In the end, the decision may rest with Pechiney's shareholders and, above all, its executives. If they try to construct an elaborate defence on antitrust grounds, perhaps the bid can be blocked. But this would probably be victory at a price: Pechiney might prevent itself from making any future acquisitions of its own.

The Economist

Text 2

Mergers & Acquisitions

Will the latest cycle of European mergers produce better

results?

COMPANIES have embarked on what looks like the beginnings of a re-run of the mergers and acquisitions (M& A) wave that defined the second bubbly half of the 1990s. That period, readers might recall, was characterised by a collective splurge that saw the creation of some of the most indebted companies in history, many of which later went bankrupt or were themselves broken up.

Wild bidding for telecoms, internet and media assets, not to mention the madness that was Daimler's $40 billion motoring takeover in 1998-99 of Chrysler or the Time-Warner/AOL mega-merger in 2000, helped to give mergers a thoroughly bad name.

A consensus emerged that M& A was a great way for investment banks to reap rich fees, and a sure way for ambitious managers to betray investors by trashing the value of their shares.

Now M& A is back. Its return is a global phenomenon, but it is perhaps most striking in Europe, where so far this year there has been a stream of deals worth more than $600 billion in total, around 40% higher than in the same period of 2004.

Shareholders' approval of all these deals raises an interesting question for companies everywhere: are investors right to think that these mergers are more likely to succeed than earlier ones?

There are two answers. The first is that past mergers may have been judged too harshly. The second is that the present rash of European deals does look more rational, but — and the caveat is crucial — only so far. The pattern may not hold.

The Economist

UNIT 9 Consolidation

• Text 1. Read the text. Summarize the text in writing.

Autos: a New Car Industry

If any industry represented America's industrial might in the 20th century, surely it was auto makers. The handful of companies clustered around Detroit produced the assembly line in 1913, tanks and aircraft engines during World War 11 and thousands of high-paying factory jobs when peace came. The industry became the backbone of the U. S. economy and its companies America's bellwethers. As cars went, so went the nation.

That's truer than ever, but it's no longer because of Motown's might. Today, it is foreign players that are reinvigorating America's car business — and turning the U.S. into the center of a global industry. An intense new wave of competition from Europe and Asia is forcing a fundamental transformation that is profoundly changing the way cars and trucks are designed and built. Of course, it's not the first time Detroit has been under assault by foreign auto makers, but this time, there's a difference, instead of arriving by container ship or being assembled from imported parts in a handful of U.S. factories, this onslaught of cars, trucks, and sport-utility vehicles is born and bred in America. The revolution is taking place in a second generation of hyperefficient foreign-owned factories that are popping up across America's rural South, far from northern union halls.

The first Japanese transplant factory appeared 20 years ago when' Honda Motor Co. began making cars in Marysville, Ohio. More followed, slowly at first. But now, they've reached a critical mass. The vehicles they make are increasingly being designed and engineered in this country. And with foreign-based manufacturers planning to boost their North American production capacity 40% by 2006, they will force a fundamental shift of investment dollars, jobs, and supplier assets from the North to the South and from American-owned companies to companies with overseas ownership. As the transplants crank out hot-selling vehicles (pickups, minivans, and SUVs), they're challenging notions of what constitutes a domestic industry. This shadow sector is more than just an encroachment: Today, more than half the passenger sedans sold in America are import brands — and more than half the vehicles sporting foreign nameplates are made in the U.S.

The new factories are woven deeply into the fabric of the U.S. economy. They spawn their own mini-galaxies of parts suppliers, subassemblers, and service businesses wherever they appear. And they're putting intense pressure on traditional American carmakers. Most important, they're forcing Detroit's Big Three to resume a painful restructuring that began two decades ago but was sidetracked by the '90s economic boom. " By putting it off, we may have amplified the consequences, " says David E. Cole, executive director of the Center for Automotive Research (CAR) in Ann Arbor, Mich.

That may be bad news for Motown, but as globalization takes root at home, the U.S. is enjoying a massive infusion of talent and investment. Indeed, looked at more broadly, the U.S. auto market has never been healthier — or better served. Here's why: