TELEFÓNICA’S BID FOR THE MOBILE MARKET IN BRAZIL (E) Harvard Case Solution & Analysis

Instance A of this chain sets the scene for the greatest merger and acquisition (M&A) deal in the telecom sector in Brazil and Latin America. Cases B to F follow on by associating the events up to the conclusion of the deal. The sequencing of this storyline forces them to take position on different questions at different times and creates a sense of urgency for readers. Occasions began 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 subsequent years, Vivo experienced double digit annual growth, as it reaped the benefits of booming consumer demand and its own significant investments. Based on Telefonica, this was an honest full and final offer. How would the board of PT see the bid? On the one hand, it represented a 100% premium on Vivo's pre-announcement stock price. On the other hand, it turned into a horrible blow to the international aspirations of the PT Group. Moreover, the occasionally conflicting perspectives of the government as well as the general public had the possibility to complicate issues further.

TELEFÓNICA'S BID FOR THE MOBILE MARKET IN BRAZIL (E) case study solution

Lastly, this deal also had international penalties that are significant. The case shows how: a) corporate governance practices vary across countries, including surroundings where there are dual-class shares; and b) the function of corporate governance in ensuring that managers undertake actions that optimize shareholder value as well as serving the needs and strategy of the firm. The case also allows for an in-depth evaluation of many different fiscal, organizational, tactical and economic problems related to growth strategies through JVs and M&As.

PUBLICATION DATE: January 01, 2012 PRODUCT #: IMD661-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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