Mergers, takeovers and sell-offs HEY Stakes and joint ventures a stake [ an imerest ina company | the shares that one investor has in a company a holding \> | stake when more than 50 per cent of the shares of a amajority | interest company are owned by one investor, giving holding, them control over how it is run stake a when an investor owns less than 50 per cent. aminority | interest of the shares of a company holding y | ‘Two companies may work together in a particular area by forming an alliance or joint ventures they may remain separate companies, or form a new company in which they both have a stake. { General Oil and PP have announced ‘Abbot Bank is doing badly, and may | they are going to merge. It will be the ¢ become the victim of a predator. There biggest ever merger in the oil industry. ') were rumours of a possible takeover by — Bullion, but it says it won't play the white knight for Abbot by coming to its Blighty Telecom is to split into two, and demerge its defence.This leaves Abbot exposed to fixed-line and mobile businesses as part of on-going restructuring. The aim of the demerger is to cut debt by £10 billion acquisition, and it may be prey to a big international bank. Abbot does have a iments de France, the French building group, is to ea mr peerage acquire Red Square Industries of the UK for 3.1 billion Special cass of shares chat will be very —_/ ‘euros. This is a friendly bid, as RSI are likely to welcome ‘expensive for a predator to buy. it and agree to it. But the takeover comes only a year air RSI ejected a hostile bid, an unwanted one. HERD Conglomerates coteon makes a series of acquisitions of retail and non-retail businesses, and becomes the parent company in a conglomerate or combine, with the other businesses as its subsidiaries. 1990s 1985 2000 Low-price general retail Shareholders complain that Cotton Group is unfocused. | Cotton Stores acquires Bestco ‘They demand that its CEO should dispose of non-retail supermarkets and diversifies companies, which they describe as non-core assets, and into food retailing. reinvest the money in its main, core activity: retailing, They say that this divestment and restructuring is, necessary for future growth and profitability. 16 Business Vocabulary in Use34,1 34.2 34.3 Match the sentence beginnings (1-5) with the correct endings (a-e). The sentences all contain expressions from A and B opposite ‘The Canadian government decided to sell 45 per cent UK Gold is a successful satellite channel cond biggest airline is trying to buy a stake sned an agreement to develop a regional jet, setting up a joint Mr Sugar’s majority holding in Amstrad 1 2 3 4 5 a-made him the UK’s 15th richest person b of the state airline to the public, and keep a 55 per cent majority stake. ¢ in which the BBC has a minority interest. d in its US counterpart so they can work out a marketing alliance. € venture company in which it will have a 46 per cent stake, Airbus 39 per cent, and Singapore Technologies 15 per cent. Which expressions in B do the underlined words in these headlines refer to? 1 4 ABC INVITES EAGLES SWOOP ON SHARKS APPROACHES Eagles, which owns Sheffield Eagles Rugby aa ee team, has bought a 40 per cent stake in ‘The financially troubled Sheffield Sharks Basketball club ABC company has in effect put itself up for sale 5 GLOBAL STORES ? BREAKING UP IS HARD TO DO ON THE LOOK-OUT Unhappy investors in W H Smith have been asking Following its acquisition of seven its managers to break up the retail group. retailers in Europe in the last five years, GS is on the hunt for. 3 CLYDE REJECTS ‘INADEQUATE’ OFFER BY CULE cattaDa REED ELSEVIER IN £20 BILLION LINK-UP WITH WOLTERS KLUWER Reed UK is set to become part of an international group with headquarters in Clyde Petroleum’s board yesterday asked shareholders to reject what it called a ‘wholly inadequate’ offer ... the Netherlands Use expressions from C opposite to complete what this journalist says about conglomerates. A company that has (1) d. may decide to limit its activities by selling those (2) s that do not fit in with its overall strategy. The board of the (3) p. ‘ may talk about (4) d.ososnonn and (5) x ., and getting out of particular businesses. In this uses the money to invest in and concentrate on its (8) ¢ activities. ase, the group (6) dass 0 Ft8 (7) Marsa © a and oN Zee solo] a Se eee ee Ue Think of a famous merger or takeover that you found interesting. Was it successful? Business Vocabulary in Use 7