Mergers, takeovers and sell-offs

a stake
an interest
a holding
a majority

a minority

l
l

in a company

the shares that one investor has in a company

stake
interest
holding

when more than 50 per cent of the shares of a

company are owned by one investor, giving
them control over how it is run

stake
interest
holding

when an investor owns less than 50 per cent

of the shares of a company

Two companies may work together in a particular area by forming an alliance or joint venture;
they may remain separate companies, or form a new company in which they both have a stake.

Mergers and takeovers

_----_

/-

--

-- -

General Oil and PP have announced

they are going to merge. It will be the
biggest ever merger in the oil industry.
----V

W
-

-"CC-----%-

\
I'

Blighty Telecom is to split into two, and demerge its

fixed-line and mobile businesses as part of on-going
restructuring. The aim of the demerger i s to cut debt by
1 0 billion.
Ciments de France, the French building group, is to
acquire Red Square Industries of the UK for 3.1 bllhon
euros.Th~si s a friendly bid, as RSI are likely to welcome
~tand agree to it. But the takeover comes only a year
after RSI rejected a hostile bid, an unwanted one.

Cotton makes a series of acquisitions of retail

and non-retail businesses. and becomes the
parent company in a conglomerate or combine
with the other businesses as its subsidiaries.

Low-price general retail

Cotton Stores acquires Bestco
supermarkets and diversifies
into food retailing.

76

Abbot Bank is doing badly, and may

become the victim of a predator.There
were rumours of a possible takeover by
Bullion, but it says it won't play the w h i t e
k n i g h t for Abbot by coming t o its
defence.This leaves Abbot exposed t o
acquisition, and it may be p r e y t o a big
international bank. Abbot does have a
poison pill however, in the form of a
special class of shares that will be very
expensive for a predator t o buy.

Business Vocabulary in Use

Shareholders complain that Cotton Group is unfocused.

They demand that its CEO should dispose of non-retail
companies, which they describe as non-core assets, and
reinvest the money in its main, core activity: retailing.
They say that this divestment and restructuring is
necessary for future growth and profitability.

34.1

Match the sentence beginnings (1-5) with the correct endings (a-e). The sentences all contain
expressions from A and B opposite.
1 The Canadian government decided to sell 45 per cent
2 UK Gold is a successful satellite channel
3 Russia's second biggest airline is trying to buy a stake
4 China signed an agreement to develop a regional jet, setting up a joint
5 M r Sugar's majority holding in Amstrad

a
b
c
d
e

34.2

made him the UK's 15th richest person.

of the state airline to the public, and keep a 55 per cent majority stake.
in which the BBC has a minority interest.
in its US counterpart so they can work out a marketing alliance.
venture company in which it will have a 46 per cent stake, Airbus 39 per cent,
and Singapore Technologies 15 per cent.

Which expressions in B do the underlined words in these headlines refer to?

'

ABC INVITES
APPROACHES

EAGLES SWOOP ON SHARKS

The financially troubled

ABC company has in effect
put itself up for sale ...
2

Sheffield Sharks Basketball cl

GLOBAL STORES
ON THE LOOK-OUT

IS HARD TO DO

Following its acquisition of seven

retailers in Europe in the last five
years, GS is on the hunt for ...

CLYDE REJECTS 'INADEOUATE'

OFFER BY GULF CANADA
Clyde Petroleum's board yesterday aske
shareholders to reject what it called a
'wholly inadequate' offer ...

34.3

REED ELSEVIER IN E20 BILLION

LINK-UP WITH WOLTERS KLUWER
Reed UK is set t o become part of an
international group with headquarters in
the Netherlands ...

Use expressions from C opposite to complete what this journalist says about conglomerates.
A company that has (1)d ................... may decide to limit its activities by selling those (2)
s................... that do not fit in with its overall strategy. The board of the ( 3 )p ...................c...................
may talk about (4) d ...................and ( 5 )r ....................and getting out of particular businesses.
In this case, the group (6) d ...................o ................... its (7)n ...................- c................... a ................... and
uses the money to invest in and concentrate on its (8) c ................... activities.

Business Vocabulary in Use

77