M&A and Private Equity-MAPE Assignment
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Task 1 (50 marks)
Fight for food (delivery)
The food delivery business is currently going through a vibrant transformation. During the COVID-19 pandemic, many people preferred (and were allowed or even encouraged by their employers) to work from home. It is not surprising that this was a boon for food delivery companies, which saw a rapid growth in both volumes and incomes.
Yet, before the pandemic, the market was scattered, with companies often operating only locally in their national markets. The competition was uneven; companies in some countries reached considerable market shares, while in others the companies were competing over consumers fiercely.
Altogether, it is not surprising that we have witnessed a major reorganisation and M&A activity in the industry after 2020. Just to mention a few notable mergers and acquisitions: Uber Eats bought Postmates, Just Eat merged with Takeaway, DoorDash bought Wolt and many others.
- Criticallyappraise what the drivers are of this Where are the synergies and cost savings coming from? What are the benefits of larger market shares? (LO2)
- Criticallyanalyse how difficult it is for food delivery companies to combine their operations. In your answer, consider various employment contracts in various countries, the business models which the delivery companies use as well as their IT (LO3)
Task 2 (50 marks) Transformation of the IT industry
Technology increasingly impacts businesses in every possible way, from supply chains to customer engagement. Technological advances such as artificial intelligence (AI) and the Internet of Things are causing ‘digital disruption’, and companies are asking how they can position themselves in this unsettling environment. Frequently, acquisitions of tech-driven and especially digital business models have become the instrument of choice to acquire needed technologies, capabilities, and products as well as to close innovation gaps.
According to BCG, high-tech deals represented almost 30% of the total $2.5 trillion of completed M&A transactions in 2016.
Write an individual report on this technology-driven transformation. Address the following issues in your paper:
- Identify and critically analyse the underlying currents of this wave of technology-driven mergers and acquisitions. Concentrate on both strategic and operational synergies. (LO1)
- Choose one specific technology-driven deal in the last five years and critically evaluate the motivations behind the Explore how the target’s focus fits into the acquirer’s business model. (LO4)
- Performa critical analysis of the deal you chose from the financial point of view. Explore the value of the deal and whether it can be judged as justified (use discounted value analysis and comparable transaction analysis in your reasoning). Explore the stock prices prior to and after the acquisition and analyse these moves (LO5)