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Agreement and Plan of Merger

Home Free essays Management Agreement and Plan of Merger

CHAPTER ONE: Introduction

1.1. Background of the study

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The Motorola Inc. Company has been in communication gadget manufacturing sector for more than a century now since its inception. In the process, the sales performance had not been pleasing until January 4, 2011 when it was announced that its shares were to start being traded on New York Stock Exchange (NYSE). Amazingly, the company entered into a Merger Agreement with Google Incorporation Company on 15th August, 2011.Under this process, the Motorola Company which is a great global innovative technologies provider, mobile and wireless digital communication gadget manufacturer was expected to benefit a lot apart from trading its shares at 40 dollars per shares hence a total of 12.5 billion dollars (Daniel & Metcalf, 2011).

Google Inc. is one of the global technology based leader that tries to improve the ways on how individuals connects through the available information. The merger was receiving a lot of fanfare across the globe because a lot of fortunes were made. Individuals invested heavily on puts and calls traded by the merged companies. To summarize the whole situation, Economists revealed that it was a market based time where the perceptions of technology were clearly embraced. The merging process of the two monolithic entities indicated that Motorola Company did not only have a long history of applied sciences (Conant, 2010).

However, the merger seems not to save Motorola image from fading into history given that it struggles through feeble minded management. Currently, the company is becoming less and less relevant to the technology market. This was witnessed by Apple Computer, one of its biggest cash flow having announced it would use Intel chips instead of those manufactured by Motorola. This forms a pivotal research gap where we need to establish whether agreement and planned mergers can help a company to improve on her market performance. We are found to question why did Motorola and Google Inc. merging process failed to save Motorola Company from fading in history (Gole, & Morris, 2007).

1.1. Research Questions

i. Does the planned merger and agreement between Google and Motorola help to improve the historical Motorola market performance?

ii. Why do other companies such as Apple Computers decide to abandon Motorola Manufactured Intel Chips?

1.2. Purpose and Objectives

The primary purpose of this dissertation is to research on the merging process between Google Inc. and Motorola Inc. Specifically, the study embraced an investigation into the reasons of Motorola fading in history amid of the merger and its great market based engineering memory in development of instrumental systems such as Android.

1.3. Significance of the study

Essentially, the study is expected to shed some light on whether agreements and planned mergers between big incorporations, for instance, Google and Motorola can really save another companys fading image. Most investors and economists are optimistic that the image of the two companies may drastically bring fortunes and hence improve on their sales performance. However, things seem to happen in opposite after several Motorola Intel software consumers, Apple Computers abandoned them. The study is also found to be instrumental on the race to help other upcoming investors on understanding the roles of mergers to a company. Moreover, the investors and economists are expected to gain vast knowledge on the realities behind mergers (Miller, 2008).

CHAPTER TWO: Literature Review

Merger is an agreement entered between two or more companies in order to strengthen their market niche. Usually financial crisis, fading historical markets and desire to improve the management system were some of the reasons behind Google Inc. and Motorola Merger. Initially, Motorola was a true based pioneer in personal communications through commercial portable cellular phone. During, the first based decade of 21st century, the cell phone industry emerged to have developed a lot of competition (Picot, 2012). In 2001, the Motorola Company introduced the V60 model and installed the Internet access, text messaging and voice based activated dialing. However, the Internet operations were very expensive hence a need to merge with Google Inc. so as to reduce the operation costs. The idea of merging was brought into a book in 2004 when it was celebrating its 30-th million cellular phone that had been manufactured in Sao Paulo, Brazil. Still, the RAZR V3 phone got into the market with exceptional features such as aircraft based grade aluminum but it did not hit the market well due to high Internet costs (Stahl, & Mendenhall, 2011).

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The Motorola Mobility Holdings, Inc. announced that in January 2011 millions of shares were going to be sold to public before trading in the stock exchange. Given that Google Inc. Company provides the Internet services, the merger was observed to be a relief for the Motorola Company in terms of cost reduction and safety for the fading product image based history. Moreover, Google Inc. was termed to be instrumental in promoting research and development.

However, in summary form, there exists a research gap within the literature review given that some of the close Motorola-Google Merger allies such as Apple Computers abandons the Intel chips and go for the rival companies. This was a clear indication that merger cannot adequately serve in saving Motorola Company fading history.

CHAPTER THREE: Research Methods

3.1. Data Collection Method

The study relied on both primary and secondary methods because they involve a lot of observation and give the firsthand information on mergers and agreements. Moreover, they ensure all information obtained is fully tapped and exhausted. Through an interview, the researcher had a deeper understanding of the merging process and an implication posed on the two companies, as well as their decision regarding the benefits and challenges. The secondary sources of information were collected from business journals, magazines, World Bank reports and other investment based documentaries relating to the Google Inc. and Motorola companies.

CHAPTER FOUR: Data Analyses and Results

4.1. Interviews

On interviewing Motorola Solutions, Chief Executive Greg Brown at the Motorola Solutions Schaumburg, Ill. Headquarters, the researcher, found that the two companies management board had conducted an adequate cost analysis, and hence the merger was logic. He revealed that the Motorola Company may cut short the internet cost of operation hence this will increase products mobility. In the process, Brown revealed that the Google Company was to enjoy Android mobile platform based access to Motorola 24,000 patents. However, he was worried that the merger was hurriedly conducted and hence it may not change the fading Motorola history. In the merger, the Motorola Company had to retain the name regardless of what Google decided, hence a move viewed by Apple Computers as not realistic. In the process, Brown indicated that this was one of the reasons the merger may not significantly help the two companies.

CHAPTER FIVE: Discussion and Conclusion

In this Chapter ,the outcome will be discussed to draw a conclusion and provide hints for future researchers.

From the secondary data collected and analyzed within the literature review plus the interview analysis through Brown, Motorola Inc. CEO, the results revealed that the merger was expected to provide a lot of cost reduction benefits to both companies with Google Inc. allowed to enjoy over 24000 patent rights. However, some of companies such as Apple computers were not happy and hence they diverted to other rival companies to Motorola. However, further studies need to be conducted to address the challenges that arise after merging process and how they can be cordoned.

5.1 Limitations of the Study

Several limitations were identified in the research process. Because of a limited amount of time, the study had to rely on secondary sources and few primary sources. Finally, there might be additional factors involved, which have not been considered yet by the author or former researches.

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