Business Case Studies, Organizational Behavior Case Study, Strategy, Market Entry Strategies Case Studies

print page
Tell A Friend
Bookmark

Mergers, Acquisitions, Alliances and Synergies Case Study

IBS CDC IBS CDC IBS CDC IBS CDC RSS Feed
Case Title:

Breaking Alliance With Fiat : Gain for GM?

Publication Year : 2005

Authors: G. Saradhi Kumar, Sumit Kumar Chaudhuri

Industry: Automobiles

Region: USA

Case Code: MAA0038

Teaching Note: Not Available

Structured Assignment: Not Available


OR





Abstract:
In 2000, General Motors’ (GM) rival, DaimlerChrysler, was planning to takeover Fiat. To keep its rival at bay, GM entered into an alliance with Fiat. The agreement included a put option clause for Fiat that could force GM to buy out Fiat, irrespective of GM's interests, any time between 2004 and 2009. In January 2005, when Fiat wanted to exercise its put option, GM refused to buy Fiat. Under such circumstances, the alliance was broken and GM had to pay Fiat $2 billion as an exit fee.

Pedagogical Objectives:

  • To discuss the benefits that GM derived out of the episode that cost the company a total of $4 billion – initial investment plus the price to pull itself out of the put option.

Keywords : Fiat;Mergers,Acquisitions,Alliances Case Study; General Motors (GM); Put option; GM in Europe; Ford Motor Company; DaimlerChrysler merger; Global alliances; Mergers and acquisitions; Synergies in alliances; Breaking-up of alliances; Global automotive industry

Related Links

Useful links

Currency Exchange Rates

Case Study :
   INR 200 = USD ($)

Structured Assignment:
   INR 150 = USD ($)

Teaching Note :
   INR 400 = USD ($)
c

Ad

Contact us: IBS Case Development Centre (IBSCDC), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad-500 082, Telangana, INDIA.
Mob: +91- 9640901313,
E-mail: casehelpdesk@ibsindia.org

©2020 - 25 IBS Case Development Centre. All rights reserved. | Careers | Privacy Policy | Terms of Use | Disclosure | Site Map xml sitemap