Merging Between Verizon and MCI and Google's Investment and Business Strategies

Accounting, Finance, SPSS
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Assignment 1
Chapter 3: CASE 1; Verizon and MCI
1. Acquiring MCI is a good option for Verizon Communications. MCI firm has a large customer base which implies higher earning potential. Additionally, the firm has an efficient fiber-optic infrastructure that accelerates new product development while saving the cost of production. In the MCI/Verizon merger, Verizon appears to have won, while MCI was on the losing end. Qwest and Verizon Communications both pursued MCI; Verizon won even though its offer was substantially lower than Qwest. MCI's board of directors noted that merging with Verizon was in the best interest of MCI stakeholders.
2. Verizon employed a friendly takeover rather than a hostile takeover of MCI due to the potential challenge of integrating these two complex businesses. Verizon also employed a popular strategy in which the merger agreement would include a special dividend payable to MCI's shareholders upon their approval. These approaches were the right ones since they strengthened the relationship between the two companies, facilitating a smooth merger.
3. In my opinion, the MCI directors acted in the best interest of both their shareholders and stakeholders. The decision to merge with Verizon Communications would increase MCI's value above its closing price. Additionally, the merger would be a tax-free reorganization, in which MCI shareholders would defer taxes until they sold their stock. Verizon Communications also acted in the best interest of its shareholders since the merger would increase the company's earning capacity and cost savings. On the other hand, MCI stakeholders (customers) indicated that they preferred a transaction between MCI and Verizon rather than a transaction between MCI and Qwest.
4. Verizon's management's argument that paying cash balances as special dividends to MCI shareholders appears to be misleading. The dividend payment would reduce MCI's cash above what is required to meet its normal operating cash requirements. My recommendation is that Verizon would have offered the special dividend as a bonus, separate from the acquisition offer.
5. Today, Verizon Communications is the second-largest telecommunication company in the USA, with a market cap of $237.0 billion and earns revenue worth $ 130 billion. Meanwhile, the telecom industry is progressing at a high rate, with companies applying innovative technologies such as artificial intelligence to secure their networks (Kocovic et al., 2017). The telecom industry is also launching internet device connectivity as everyday products are integrated and linked to the internet. The most recent mergers include the Vodafone and TPG merger, the T-Mobile and Sprint merger, and the Equinix acquisition of Packet.
Chapter 5: CASE 2; Google and Hardware
1. Innovation is Google's primary and most significant core competency. The Company uses unique think processes to invent and innovate products that fill market niches. Regarding market needs, Google mainly provides a way for its customers to obtain relevant information that is useful for daily living. This is seen in inventions such as the search engin...