Fundamentals of Business

Acquisition

An acquisition, also known as a takeover, is the buying of one company (the 'target') by another.

Example

Extract from From the newsroom of the BBC World Service Thursday, April 1, 1999 Published at 09:58 GMT 10:58 UK World: Europe

BP acquires Atlantic Richfield

The British oil company, BP Amoco, has announced that it is buying the American oil producer, Atlantic Richfield, for just under twenty seven billion dollars. The deal, which has to be approved by shareholders, makes BP the second biggest private oil company in the world after Exxon Mobil in terms of capital value, and the largest in terms of oil output. The chief executive of BP, Sir John Browne, said the deal offered immense potential for future growth. But correspondents say it's expected to lead to about two thousand job losses. BP's purchase of Atlantic Richfield comes just three months after it bought Amoco for fifty five billion dollars.

Strategi Strategic Alliances

A Strategic Alliance is a formal relationship formed between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.
Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property.

The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.

BA seals alliance with American

British Airways says it has sealed an alliance with American Airlines that will allow the two carriers to agree fares, routes and schedules together.

The move will also include Spain's Iberia, which is merging with BA.
With aviation fuel prices near record levels and spending on air travel slowing, airlines are looking at ways to cut costs.

But the carriers will have to persuade the US that the deal does not break US rules on foreign ownership of airlines.
'Good news'
However, BA chief executive Willie Walsh said the relationship would strengthen competition by providing consumers with easier journeys to more destinations. He has rejected claims of a greater monopoly. "This may not be good news for Richard Branson but it is good news for consumers", Mr Walsh told the BBC.