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Essay / Research Paper Abstract
This 10-page paper discusses mergers and acquisitions and their differences. Also under discussion is the merger between Air France and KLM, the dynamics and predicted outcomes. Bibliography lists 10 sources.
Page Count:
10 pages (~225 words per page)
File: D0_MTairklm.rtf
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Unformatted sample text from the term paper:
efforts to cut costs and boost revenues. By allying with companies that have similar products and services, the theories behind mergers and acquisitions are that synergies could match up, meaning
billions could be saved in repetitive tasks and efficiencies increased. The resulting savings, its believed, could then be passed on down to consumers, which would increase competition and spur demand.
However, in many industries, mergers and acquisitions seem to have had the opposite effect. Instead of passing on cost savings to consumers,
M&As have instead turned the competitive industries into oligopolies and at times, even monopolies that could pretty much charge anything they wanted to, and because of their scarcity, consumers would
have little choice. In the United States, mergers in the airline industry seems to be the norm. Since deregulation in 1979, U.S.
air carriers have been operating (more or less) by competitive values, with more carriers entering and either succeeding, or declaring bankruptcy, or merging with a stronger carrier in order to
survive. But thats the U.S. In Europe, the industry is vastly different -- for one thing, there isnt as much competition, namely because most European governments own controlling stakes in
the various airlines. Furthermore, until just recently, foreign ownership of most of these airlines has been prohibited, meaning M&As simply arent allowed, at least not in the conventional sense of
U.S. carriers. But all that could change, with Air Frances recent acquisition of Royal Dutch KLM, the major air carrier of the
Netherlands. Air Frances official early May 2004 acquisition of this company, the first of its kind in Europe, so far has cleared regulatory hurdles and is being touted by each
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