Instance A of this chain sets the scene for the greatest merger and acquisition (M&A) deal in the telecom industry in Brazil and Latin America. By relating the events up to the deal's judgment cases B to F follow on. The sequencing of this storyline compels them to take position on various questions at different times and creates a sense of urgency for readers. Events started in 2003 when a 50:50 joint venture (JV) between Portugal Telecom (PT) and Spain's Telefonica got 60% of Vivo, the leading Brazilian mobile operator. In the following years, Vivo experienced double-digit annual growth, as it reaped the gains of booming consumer demand and its own significant investments. According to Telefonica, this was a fair full and final offer. How would the bid be regarded by the board of PT? On the one hand, it represented a 100% premium on Vivo's pre-announcement stock price.
On the other hand, it turned out to be a terrible blow to the PT Group's international aspirations. Moreover, the sometimes conflicting viewpoints of the government and the public had the possibility to complicate issues further. This deal also had international implications that are important. The instance shows how: a) corporate governance practices vary across states, including surroundings where there are dual-class shares; and b) the role of corporate governance in ensuring that supervisors undertake actions that exploit shareholder value and serving the requirements and approach of the business. The case also allows for an in depth analysis of an assortment of organizational, strategic, fiscal and economic issues linked to growth strategies through JVs and M&As. The essential focus of the case is on the links between strategy and finance.
TELEFÓNICA'S BID FOR THE MOBILE MARKET IN BRAZIL (F) case study solution
PUBLICATION DATE: January 01, 2012 PRODUCT #: IMD662-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Lyondell Chemical Company
Business of Golf: Islington Golf Club
Megalith Inc. — Hay Associates (A)
Dozier Industries B
Gabriel Resources: Foreign Direct Investment in Romania
Northampton Group Inc.: How to Increase Shareholder Value
Braddock Industries, Inc.
Craig Manufacturing
Wilford Brimley and Direct Response Advertising at PolyMedica Corporation
International Economics, 5. Politics, Globalization, and the State
