Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 31 n° 275

Posts Tagged ‘comment’

EU referendum result expert comment

Posted by fidest press agency su venerdì, 24 giugno 2016

gran bretagnaProfessor Stephen Roper can talk on SMEs. He researches SME growth and innovation and is Director of the Enterprise Research Centre.
Professor Roper said: “Small businesses need to prepare for a period of volatility as markets react. Gains in terms of reduced regulation and EU membership costs may follow, but are probably some years off.”Over the next few weeks a weakening of sterling will help exporters, but will make euro imports more expensive, raising all small firms’ input costs. Interest rates too may need to rise raising business borrowing costs. Longer term, European firms may also switch orders away from the UK to insulate themselves from any changes in trading relations between Britain and the EU.”The gains for small firms from Brexit are probably two to five years away. There is potential for reduced regulation and new trade deals, but the timing and effects of both remain uncertain. Outside the EU the UK will also be free of EU competition and state aid rules allowing the UK government to provide more direct support to SMEs.”Professor Christian Stadler can talk on multinationals. He is the author of Enduring Success, which involved researching Europe’s biggest companies:Professor Stadler said: “It is not clear what’s happening next and businesses will be reluctant to invest. I don’t expect that there will be a massive exodus, but rather than expanding in the UK, companies are likely to do it in Europe instead, particularly for businesses which export to the EU.”The devaluation of the pound should help exports slightly, but it will be an issue for all those who have EU suppliers. There is an expected contraction of the UK market, which will hit sales in the UK.”In the long term if the UK follows the Swiss model, which is essentially adopting EU regulation minus having a say in the decisions, this would be the better option for businesses as it puts dealing with the EU more or less back to where it is at the moment. This will be an issue for some industries, like banking, as they won’t have much of an influence on regulation anymore. We see that in Switzerland for the pharma sector for example. Politically this would be a difficult one to pull off as people have to put up with the things they did not want – most prominently immigration.”If the UK takes a tougher stance on immigration, for businesses this will be a disaster as the EU will retaliate. Access to the EU will become difficult. For some companies this means doing business in Europe won’t be attractive any more. Others will have to deal with complicated bureaucracy. In short: a nightmare.”
Professor Kamel Mellahi can talk on China’s reaction. He researches emerging markets and business strategy in China:
“A key concern for many Chinese firms who have invested in the UK is that Brexit will see their business suffer because they will find it difficult to access EU markets from Britain. A big part of the appeal of the UK for Chinese investors is access to the EU.
“A significant number of Chinese businesses see the UK strategically placed as a gateway to EU markets, but with a Brexit they may put on hold investment in the UK until a clearer picture over trade deals with the EU emerges. This may not be the case for sectors that are more detached from EU markets such as real estates and higher education.”It will be interesting to see whether Chinese and other Asian companies that have committed investment and have their global or European headquarters in the UK will move part or all their investments to the euro zone now. If one goes by what has been widely reported by Chinese corporate leaders, Brexit will dampen the appeal of the UK for Chinese investors.”

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Expert comment on Microsoft buying LinkedIn

Posted by fidest press agency su martedì, 14 giugno 2016

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Expert comment on Microsoft buying LinkedIn Mark Skilton, of Warwick Business School, is a Professor of Practice in the Information Systems & Management Group and researches technology ecosystems around defining value and monetization. He is the author of Building digital ecosystem architectures and Building the digital enterprise. Professor Mark Skilton said: “The acquisition makes sense in respect of Microsoft’s link with enterprise in its cloud platform and portfolio of enterprise business services, it will help Microsoft build out its enterprise services capabilities. “The long running rumours of LinkedIn not being able to develop any new growth strategies, with its net income falling year on year from 2011, have finally come home to roost with the Microsoft acquisition of $26bn in cash.”LinkedIn has grown a user base of 106 million active users, but compared to 310 million active Twitter users and the mighty 1.65 billion Facebook monthly users, LinkedIn has never managed to grow its commercial services in what could have been a strong enterprise market. “LinkedIn makes two thirds of its income from talent solutions in recruiting and job market services that define it and the remainder in selling marketing solutions and premium subscriptions. It has remained the website to go to for professional networking.”

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Expert comment on the LSE saying its merger with Deutsche Boerse could lead to 1,250 job losses

Posted by fidest press agency su venerdì, 3 giugno 2016

Warwick_Business_School_Scarman_road_viewIf you are looking for expert comment on the LSE saying its merger with Deutsche Boerse could lead to 1,250 job losses John Colley, of Warwick Business School, is a Professor of Practice in the Strategy & International Group and researches large takeovers. He is also a former MD of a FTSE 100 company that was involved in a hostile takeover.Professor John Colley said: “The announcement does not indicate where the job losses will fall, suggesting they will be spread between the businesses. There is concern that the bulk may fall in London as redundancies will be cheaper there than in Germany. Secondly there is some scepticism as to whether this is truly a ‘merger of equals’ or a German takeover. No doubt this will become clearer with time. “Some would say that the LSE and Deutsche Boerse are ‘jumping the gun’ by announcing up to 1,250 job losses or 14% of the workforce, as part of the €450 million savings from the €30 billion merger. “The announcement suggests they do mean business, but it could look impetuous if the European Commission objects to the tie-up. This remains a possibility as there are plenty of competition concerns and, indeed, political sensitivities to the ‘merger of equals’. Treatment of the two clearing houses, LCH.Clearnet and Eurex, is bound to be an issue and the EC is likely to require some assurances around them remaining separate. Otherwise a merger may be viewed as ‘too big to fail’.”The announcement does strongly suggest that shareholder consultation on both sides points to clear support for the merger. Shareholders will not be an impediment to the deal.”Advisor fees on the friendly merger are a staggering €307 million, the bulk of which have been incurred by the LSE. These do seem excessive in view of the limited nature of the necessary work.”There are €160 million of revenue benefits although there is scepticism from many as to whether these are achievable. The combination will be bigger than the two major US exchange networks, ICE and Nasdaq.”

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Expert comment: Sombre mood in Greece, despite Eurozone deal unlocking €10.3bn

Posted by fidest press agency su giovedì, 26 maggio 2016

cartina-grecia-centrale-atticaMarianna Fotaki, a Professor of Business Ethics at Warwick Business School who researches leadership in the EU and economies in transition, has made the following statement:”With another 10.3bn Euros in loans being agreed in a customary all-night marathon by its creditors to see the country thorough till October 2016 in exchange of far reaching reforms, you would think this was a successful ending to a bad long story. Yet no-one is jubilant in Greece; not even the governing left-leaning Syriza coalition.
“Greek citizens feel they have run out of options; the mood is sombre and there is an impending sense of gloom after its government agreed to put the country under the lenders’ supervision for 99 years! “This is deemed necessary given Greece’s insurmountable debt has reached 180% at present, a figure only set to rise further. The promised ‘breakthrough’ debt relief is vague and will only apply from 2018 (after German elections) whilst the unrealistic surplus target reaching 3.5% in 2017 are still expected and will be most likely delivered through further cuts as the Greek economy continues to shrink.”People in Greece are also fully aware that most of the new bailout money will be used to pay for loans their previous governments obtained from the French and German and the troika of lenders (EU, ECB and IMF) have now passed onto the Eurozone citizens.”While by most counts the austerity policies imposed by Greece’s creditors have been an abject economic and moral failure, kicking the can down the road continues while the principles of democratic governance in Greece and Europe are eroded yet further.”

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Expert comment on Three’s takeover of O2 being blocked by the EU

Posted by fidest press agency su giovedì, 12 maggio 2016

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John Colley, is a Professor of Practice in the Strategy and International Business group and researches large takeovers. He is also a former MD of a FTSE 100 company. Professor John Colley said: “It comes as little surprise that the EU competition authorities have said enough is enough on the rapid concentration of the UK mobile telecoms sector. “Following the merger of T-Mobile with Orange, subsequently purchased by BT, the industry was reduced to four players. The proposed merger of Three with O2 would have made it three players and the evidence from markets elsewhere shows that three players results in higher prices for consumers compared to four. In effect competition reduces and the consumer pays the price for that. “It is clear that the merger would have substantially reduced costs in requiring less shops, marketing, administration, head offices and there would have been benefits in terms of reduced network operating costs. However, the reduced competition would have meant that Three/O2 would not have to pass those savings on to the consumer.”

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Expert comment on Toshiba appointing Satoshi Tsunakawa as its new chief executive

Posted by fidest press agency su sabato, 7 maggio 2016

Warwick Business SchoolSatoshi Tsunakawa as its new chief executive Christian Stadler, of Warwick Business School, is a Professor of Strategic Management and researches succession planning as part of long-term success and is author of Enduring Success. Professor Christian Stadler said: “Toshiba’s decision is right. He has a strong record, with experience including the US market, strategy, and sales. In a highly diversified firm, one of the main challenges for him will be to understand the businesses he had less exposure to.”After a scandal, shareholders and the press typically call for an outside CEO, somebody who can offer a fresh start. While this seems sensible on paper, it is difficult in large organisations for an outsider to master the complexity that takes years to understand.
“In my work on companies which succeeded for more than 100 years, successful companies prefer internal candidates; only 3.2 per cent of the CEOs were outsiders. Interestingly that pattern also holds after scandals.”For example, when Phil Watts resigned after Shell overstated its reserves, Jeroen van der Veer, a Shell-lifer, took over. He managed to make substantial changes during his tenure at the helm of the company, precisely because he was an insider.”Siemens opted for a CEO from outside, Peter Loescher, when it was caught up in a bribery and corruption scandal. He did a great job, dealing with compliance issues, but eventually he was forced to resign, as he was less successful in other business issues. This highlights the danger of appointing outsiders: they present a clear departure from the past, but they are less able to make internal changes.”An important thing to bear in mind: the top job is a lonely job. Most people working for the CEO want to please them. So to learn what’s really going on is not an easy task. Insiders are at an advantage here as they have built networks over their career that allow them to also connect with people a bit further down the corporate ladder.

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Expert comment on Volkswagen reportedly buying back diesel cars in the US

Posted by fidest press agency su venerdì, 22 aprile 2016

volkswagenExpert comment on Volkswagen reportedly buying back diesel cars in the US. Christian Stadler, of Warwick Business School, is Professor of Strategic Management and has researched Volkswagen. Professor Christian Stadler said: “What is still uncertain is whether this also resolves issues Volkswagen has with the US Justice Department. There is a pending civil suit and an on-going criminal investigation. If this deal manages to also resolve these issues it is really great for Volkswagen. “From the perspective of the car owners it sounds like a decent deal. They will be able to sell back the car or get the issue fixed. On top of this they will receive some compensation. It remains to be seen how much this is but I presume that even a modest sum will be welcome.”

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Expert comment: Mitsubishi Motors admits falsifying fuel economy tests

Posted by fidest press agency su giovedì, 21 aprile 2016

Expert comment on the news Mitsubishi Motors has admitted to falsifying fuel economy tests. Christian Stadler, a Professor of Strategic Management at Warwick_Business_School_Scarman_road_view with expert knowledge on the automotive sector, has made the following statement:”After Volkswagen Group and its ‘dieselgate’ scandal it is not surprising another automotive firm has been caught out and admitted to manipulating emission test results. It was almost expected and almost comes down to how much can you get away with before you take a step too far. With companies constantly making tweaks and optimisations to get around these tests, there was always the chance that they would eventually cross the line and get caught out.”Where Mitsubishi has an advantage is that this may not quite have the same traction as the VW scandal as we’ve now been exposed to the issue already. They can also learn what went well or what went wrong in how VW handled the situation and know that the best course of action is to fully co-operate and not to hide anything as that would only bring further attention that is obviously not wanted.”

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Expert comment on Yahoo’s revenues falling in first quarter results

Posted by fidest press agency su mercoledì, 20 aprile 2016

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The expert comment on Yahoo’s revenues falling in first quarter results. Sotirios Paroutis, of Warwick Business School, is an Associate Professor of Strategic Management and has studied Yahoo.Dr Sotirios Paroutis said: “While slightly better than expectations, Yahoo’s results point to a gradual decline in most financial indicators over time and against key competitors. What parts of the business will be sold to whom and at what price are the next strategic decisions for Yahoo’s management. These decisions will define the legacy of CEO Marissa Mayer as a leader. “Some vocal investors have given the firm’s management until its annual meeting to deliver results on the sales front. While Yahoo’s management participates in daily meetings with a new committee of independent directors to consider strategic alternatives – time is now fast running out. Delivering successfully on the sales front is now a key priority.”

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Expert Comment: Peroni and Grolsch brands sold by AB InBev to Asahi

Posted by fidest press agency su mercoledì, 20 aprile 2016

The expert comment on the finalised acquisition of the Peroni and Grolsch brands by Asahi. Te expert is John Colley, a Professor of Practice at Warwick Business School who has extensively researched mega mergers, has made the following statement: “This deal suggests the merger with SABMiller is close to closing and that they believe they will soon get the necessary regulatory approvals particularly in US, Europe and China. The real prize is stronger positions in Africa and Latin America which are the future growth markets for beer. Elsewhere demand is largely flat. “The deal has come at a high cost with substantial forced disposals in addition to the $106Bn needed to convince SABMiller’s shareholders. Assets sold to allay competition fears include worldwide rights to the Miller brands which went to MolsonCoors, Snow brand to China Resources Enterprise, and now Peroni and Grolsch to Asahi of Japan. “The speed at which the deal has been done demonstrates the determination of AB InBev to complete on the SABMiller deal. This will give them almost 30% of the global beer market. It does mean that the merger will make AB InBev by far the world’s biggest brewer with Carlsberg and Heineken a long way back. Unfortunately, it is difficult to see how this level of concentration will be in the beer drinkers’ best interests. “However the overall price of the deal and the extent of necessary disposals suggests that AB InBev’s shareholders may not benefit either.”Asahi is the biggest Japanese brewer with 38% of the market but little outside Japan. Clearly this signals global ambitions for Asahi as it will give them a strong position in many developed markets. “Access to distribution through these two premium brands and relatively local brewing will mean that Asahi’s own range of Super Dry ales can be introduced to wide distribution. This is at least good news for the beer drinker as it may well lead to more choice and more competition.”

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Expert comment on Orange and Bouygues Telecom merger collapsing

Posted by fidest press agency su martedì, 5 aprile 2016

Warwick. Expert comment on Orange and Bouygues Telecom merger collapsing John Colley, of Warwick Business School. John Colley is a Professor of Practice in the Startegy and International Business Group and researches large mergers. He is also a former managing director of a FTSE 100 company.
Professor John Colley said: “Margins have been struggling in the French telecom market and the merger of Orange with Bouygues was intended to address that. Research from other telecom markets finds that three players have higher prices and lower costs than four. This is no surprise as there are less competitors to compete with and fewer shops, masts, plus less advertising, administration and management.”It is unclear why the deal collapsed and it seems that Bouygues’ directors would lose out in the resulting allocation of jobs. However, clarity over leadership would have reduced execution risk. Undoubtedly competition authorities would be involved as the combined market share of Bouygues and Orange would have been almost 50%, well above the interest threshold. Typically in the telecoms industry the largest player is the most profitable as they enjoy the highest call volumes and customer numbers through what is a fixed cost structure.”But Bouygues is now in play so expect Altice to come back with a second bid, which Bouygues may struggle to reject this time. Bouygues’ shares are down 15% already, which makes a bid from Altice look more attractive than last time.”

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Expert comment on Moody’s cutting China’s outlook to negative

Posted by fidest press agency su giovedì, 3 marzo 2016

pechinoKamel Mellahi, comment on Moody’s cutting China’s outlook to negative. Kamel Mellahi, of Warwick Business School, is a Professor of Strategic Management and researches business in China. Professor Kamel Mellahi said: “While the Aa3 rating is still respectable, the report from Moody’s highlights the slow implementation of necessary and much-needed reforms. The calls for faster and deeper reforms are getting louder.”The concerns are mostly about the speed of reforms rather than the direction of them and that they are not far reaching enough. Also, addressing the underlying causes of the erosion of the country’s foreign reserves as a result of swelling capital outflows, and resolving the government’s debt problem is going to be a painfully long and protracted process. There are no quick and easy solutions to such complex problems.”

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Expert comments on $43bn (£30bn) proposed acquisition of Syngenta by ChemChina

Posted by fidest press agency su giovedì, 4 febbraio 2016

Kamel Mellahi, a Professor of Strategic Management at Warwick Business Schoolwho has studied key Chinese businesses for a number of years, has made the following statement comment on the $43bn (£30bn) proposed acquisition of Syngenta by ChemChina: “This is an acquisition driven primarily by growth strategy, and not potential synergies that usually result in cost cutting and reduction of workforce. So the deal is good news for both Syngenta’s shareholders as well as its employees.”Syngenta has been going through challenging times recently, mainly because of its exposure to uncertainties in emerging markets and the recent collapse of commodity prices. For ChemChina, acquiring one of the world’s leading manufacturer of agricultural and chemicals and seeds with world class resources and capabilities will enable it to access valuable knowledge that could help its drive for innovation.”Most of the problems with such acquisitions tend to rise later on when the two firms try to integrate their processes. But typical of international acquisitions by Chinese firms, ChemChina is keeping Syngenta’s existing management which will continue to run the company, while the board of directors will be chaired by ChemChina’s head.”

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Expert comment on the Dow Chemical and Du Pont merger

Posted by fidest press agency su sabato, 12 dicembre 2015

Expert comment on the Dow Chemical and Du Pont merger, John Colley, a Professor of Practice at Warwick_Business_School_Scarman_road_view and an expert on large mergers, has made the following statement: “The newly created organisation will be split into three new businesses, thereby avoiding the label of a chemicals conglomerate which attracts a discount in the share price – typically investors shun conglomerate shares due to low growth expectations.
“Activist shareholders have been lobbying for a split.Their belief is that constituent businesses will have better stock market ratings separately, than as a whole. Overall the deal should create significant value in an industry which has struggled for growth in recent years. Petrochemicals and agrochemicals have been highly competitive markets with sluggish growth. The new businesses are likely to be plastics, agrochemicals and speciality chemicals.”The intention is to merge their respective divisions. This will create greater scale and scope economies, regional and divisional management savings and importantly higher market shares and more market influence. Ultimately this may mean less competition, less consumer choice and conceivably higher prices. However, competition regulators in a number of markets, will have plenty to say about these issues.”These regulatory concerns could jeopardise the deal. The Department of Justice showed its teeth recently with GE withdrawing from the sale of its consumer durables business to Electrolux. This was as a result of signs that the deal would not be cleared. More concerning, is the tag ‘merger of equals’ which normally precedes a botched integration. Clarity and unity of leadership in achieving merger benefits is critical to achieving the expected returns. Research shows that ambiguity in leadership usually results in a failed merger, just ask Daimler and Chrysler for one.”Savings have been estimated at $3 billion a year. This is likely to be a conservative figure. Much will be through job reductions, so employees are unlikely to favour the deal. In process industries, such as chemicals, enormous scale economies can be achieved through merging and concentrating production on the biggest most modern plant located nearest to demand.”

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Expert comment: Can the AB InBev, SAB Miller merger buck the trend of destroying value?

Posted by fidest press agency su giovedì, 12 novembre 2015

As the AB InBev and SAB Miller merger is finally agreed, John Colley, Professor of Practice at Warwick Business Schooland an expert on large-scale mergers, discusses what the deal and subsequent selling of MillerCoors means for the industry.”In view of the size and scale of AB InBev post the SAB Miller deal, there is likely to be further consolidation amongst the remaining players. This is a trend in the pharmaceuticals industry, where valuations are increasing as the industry rapidly consolidates. Size is necessary to compete on cost grounds and distribution grounds. Maintaining product availability through distribution requires sizeable advertising budgets in order to compete with the big brands. Molson Coors may not be independent for long. “For shareholders $106Bn is a steep price. Cost savings are estimated at $1.4Bn or seven per cent of sales. This is a figure well below expectations suggesting that pricing and distribution benefits may be the real driver of the deal. Forced sales such as the shareholding in MillerCoors through competition authority pressures with others to follow, possibly in China, Latin America and Europe, means lost value to shareholders. Further concessions may also be required in the USA. At what point does this become value destroying? Research shows most acquisitions result in destroying value rather than creating it. Will this deal buck the trend? “Big brand brewing is highly profitable due to scale and scope economies related to the size of the main players. However it is their stranglehold on distribution through bars, restaurants, supermarkets and entertainment venues which prevents effective competition. The power of advertising together with product availability is highly potent – just ask Coca Cola. A glance at AB InBev’s results shows that big brands are continuing to make ground further limiting competition. Beer markets are declining in many countries. This is partly through the move to craft beers, together with increasing popularity of wines and spirits.”It is rare that the number one player in an industry buys the number two player, creating a worldwide market share of almost 30 per cent in a consumer market. The global brewing industry is already concentrated, with the top five (soon to be four) sharing almost 50 per cent of the market.”Research shows that less competitors in an industry, and specifically the brewing industry, results in higher profits and consequently less consumer choice. This merger is likely to further restrict consumer choice. It will also limit price competition in an industry which already demonstrates stratospheric levels of profitability. AB InBev has Earnings before tax, depreciation and interest (EBITDA) of around 40 per cent. The beer consumers’ hope is the growth of craft beers. These are rapidly multiplying and have a significant share in pub sales.”

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Expert comment on Twitter’s Q3 results

Posted by fidest press agency su giovedì, 29 ottobre 2015

Expert comment on Twitter’s Q3 results Sotirios Paroutis, of Warwick_Business_School_Scarman_road_view is an Associate Professor of Strategic Management and researches Twitter.Dr Sotirios Paroutis said: “The Q3 financial results provide the basis for some early optimism that Twitter’s attempt to simplify its organisation and services is working – but much more work needs to be done. More work is needed to keep simplifying the experience, and keep engaging developers, advertisers, and users.”Three areas sum up what is happening at Twitter: Twitter Moments, videos and the small and medium sized businesses channel. Moments is a fundamental shift in Twitter’s thinking – where users follow topics live instead of accounts – and encapsulates current efforts to make Twitter easier to understand.”With the volume of video consumption on the increase, Twitter is trying to attract the display ad budgets of advertisers. In Q4 there will be more related products, such as the new video narratives in the form of Promoted Moments. There are nine million small and medium sized business accounts on Twitter that represent a new marketing channel the firm has yet to fully utilise.”An impressive 86% of Twitter’s total advertising revenue was mobile-based, which it can build on. CEO Jack Dorsey focuses his company on the small and the big – on maintaining the momentum of improvement in its current products and, at the same time, thinking big and executing bold new initiatives. On both fronts, he has promised an increase in the pace of his firm’s execution going forward. This pace does need to increase to keep Twitter relevant and easier to understand for more people.”

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Expert Comment: AB Inbev and SAB Miller merger good news for shareholders, but not staff or consumer

Posted by fidest press agency su giovedì, 15 ottobre 2015

If you are looking for an expert comment on SABMiller accepting a takeover bid in from rival AB InBev , John Colley, of Warwick_Business_School_Scarman_road_view is a Professor of Practice, a former CEO of a FTSE 100 company and researches large takeovers. He has made the following comments:
“AB InBev has paid a reasonably full price for SAB Miller which certainly passes some of the merger benefits to SAB Miller shareholders.
“AB Inbev shareholders will be hoping that it can extract the planned benefits and overall for once I would have said it is a decent deal for both shareholders as AB InBev probably will extract the synergies and consolidate a declining market. I say this because the majority of major acquisitions fail to extract planned synergies and more than half destroy value.”That said AB InBev does have a good record with previous acquisitions. However, expect substantial redundancies and cost savings over the next year.”Product ranges are also likely to be rationalised allowing greater investment in the retained brands. However for the customer one in three beers will be produced by AB InBev as a result of this merger which suggests less choice and less competition.”The global beer market overall is largely flat and in some regions is declining as other beverages such as wine continue to penetrate. Micro Brewers and their highly differentiated cask ales also continue to make progress. As a consequence cost, product and distribution rationalisation become an attractive way of increasing shareholder returns.”In major manufacturing operations economies of scale can be enormous which means breweries will be rationalised to focus on the largest and most modern. Scope economies will be substantial too as Head Offices and country management teams are likely to be rationalised. Combined purchasing power should also realise substantial savings. AB InBev has both a reputation and demonstrable track record for being able to effectively extract these savings.”

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Expert comment on China cutting interest rates after the market turmoil

Posted by fidest press agency su mercoledì, 26 agosto 2015

Expert Kamel Mellahi, of Warwick_Business_School_Scarman_road_view, comment on China cutting interest rates. Mellahi is Professor of Strategic Management and researches emerging markets.He said: “The market is looking for some strong signs that China has enough ammunition and more importantly it is willing to use it effectively to weather this storm. The cut of interest rates by 0.25 per cent and lowering the bank reserve requirement ratio by 0.5 per cent may calm the stock market turmoil, but does not address the underlying causes”The devaluation of the yuan, a decline in exports, and multiple signs that China’s economic pulse is slowing down at a much faster pace than expected have created a toxic cocktail, fuelling uncertainty and eroding confidence in the turnaround of the Chinese economy. The Chinese economy has hit some rough weather for sure. But is it a passing storm? I think so. What we are seeing now is a dress rehearsal of things to come. The Chinese economy is going to be on this bumpy road for a while and it will have ebbs and flows that will no doubt have a serious impact on the global economy.”The devaluation of the yuan was widely perceived as an export boosting measure to aid economic growth, which only fuelled concern about the health of the Chinese economy. But the devaluation may not be sufficient enough to boost export demand enough to achieve this year’s seven per cent growth target.”With $4 trillion of bank deposits, China still has the financial firepower to alleviate market pressure. But the Government’s reluctance to initially interfere aggressively to calm markets around the world suggests that China has finally decided to let market forces play a bigger role in deciding the value of the currency.”China is concerned that aggressive interference in the market may sow the seeds for future problems especially worsening the credit growth which is already high and could go out of control.”

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Expert comment on global stock markets falling sharply

Posted by fidest press agency su martedì, 25 agosto 2015

Lei Mao, of Warwick Business School, is an Assistant Professor of Finance and researches the effect of information on asset pricing.Dr Lei Mao said: “The plummets in stock markets around the world are very serious, though in the short-term I think there will be a rebound because they have been over-sold. However, in the long-term, I think there is a serious problem for the global economy because new demand in China is becoming less likely, and as it is such a big engine driver for the world economy, there is a possibility this will lead to the global economy slowing down.”It seems that the Chinese economy is slowing down faster than expected, and there is expectation that the renminbi will devalue further this year. We are seeing capital drain out of the country and companies with exposure to the Chinese market will suffer. Plus, Chinese companies will start exporting more to make up for the lack of domestic demand, facilitated by the weak renminbi, which will put pressure on many emerging markets.”The Chinese Government is facing a difficult problem in policymaking: it is almost impossible to carry on economic reform to create domestic demand and upgrade productivity when the GDP statistics are so alarming.”

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Expert comment on Twitter’s shares falling below its IPO

Posted by fidest press agency su sabato, 22 agosto 2015

Warwick_Business_School_Scarman_road_view(By Ashley Potter) Expert comment on Twitter’s shares falling below its IPO Joe Nandhakumar, of Warwick Business School, is a Professor of Information Systems and researches social media.Professor Joe Nandhakumar said: “Investors are impatient. They are panicking as Twitter has
struggled to turn a substantial profit and the users aren’t growing fast enough to thrive. Not having a permanent CEO doesn’t help either.”While these are important concerns, investors do not seem to understand the potential ‘worth’ or ‘value’ of Twitter. Like many other novel digital innovations, Twitter grew and developed without an upfront business model or value proposition in its early stages, as it was challenging to know the potential uses and users of its emerging innovation. “Counting users is not helpful as active users are difficult to define. Instead investors should focus on value generation potential and Twitter’s strategy towards this. Twitter is part of a digital delivery of news and micro-blogging ecosystem, which has tremendous potential to generate value. “Recent research suggests that such digital innovations have huge re-combinable features, Twitter combines easily with other highly-developed digital resources togenerate a large amount of value. It takes time to hammer out ways to develop these services so that they can be readily combined and mobilised with other services to capture value. But Twitter is making good progress with, for example, generating ad revenue when Tweets appear on other media.”

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