StudentShare solutions
Triangle menu

International Finance & Capital Markets - Essay Example

Not dowloaded yet

Extract of sample
International Finance & Capital Markets

The company has the desire to acquire China COSCO Holdings Company Limited, which is mainly a logistics and shipping supplier company. The plan for acquisition is evaluated in order to examine whether it will be a success for both the companies. Babcock International had been planning for expansion internationally for the past few years. However, they were targeting the Chinese market in particular. The acquisition plan has been in the negotiation stage and thus there is a need for providing the Board of Directors of Babcock International with recommendations from the financial director regarding the collaboration with COSCO. The cross border acquisition brings a number of issues like the exchange rate risk along with the cross border trade. The plan is evaluated by evaluating the solvency, liquidity and the profitability position of both the companies. The balance sheet of the companies is compared in order to make a decision regarding the collaboration plan. The recent acquisitions of Babcock International are also examined in order to evaluate the strength of the company and get an idea whether it is capable for the acquisition of COSCO. Introduction Babcock International Group PLC is an established company in United Kingdom which is the part of the European Union (EU). The European economy is the world’s largest importer globally in 2011 (16.4%). It is also the largest exporter in the world, exporting 15.4% of all the exports across the globe. Rules and regulations are very strict in EU which possesses restrictions to the companies at different levels of business. Thus it is important for Babcock to obey the rules and regulations of the country and take decision regarding the acquisition China COSCO. The EU also provides investors with a unique market for investment after passing the Markets in Financial Instruments Directive (MiFID) in 2008. Merger and acquisition is viewed as the change agent for any company. The action is taken for expanding or contracting the basic operation of the firm which is also known as corporate restructuring. There are different types of acquisition which includes the cross border, local country and home country acquisition. Babcock is panning for cross border acquisition as it is deciding to acquire China COSCO which is leading logistics and shipping Supplier Company in China. The acquisition plan of China COSCO by Babcock will be successful if the following conditions are fulfilled: 1) The creditors and the properties of China COSCO are protected by courts. 2) Babcock has clear knowledge regarding China COSCO. 3) The growth of China COSCO encourages rapid market penetration of China. 4) The entry barriers are considerably high. 5) The cultural difference between UK and China are low. 6) Babcock is relatively larger than size of China COSCO. 7) Babcock has the ability to take the risk of acquisition. 8) Babcock has experience of the local markets of China. 9) Babcock is quite late in entering China market (Clark, 2002) The above conditions are necessary to be fulfilled if the acquisition has to be successful. Babcock has a plan for entering the markets of China for a long time. The proposal of the acquisition is examined by evaluating the financial strengths of both the companies. The benefits of the investors are also concentrated upon. The negotiation ...Show more

Summary

International Finance & Capital Markets Executive Summary Growth of any business internally can encounter high risk in this dynamic world of business. Thus there is always a need for acquiring existing business by the entrepreneurs. The strategy is less risky and it eradicates the problems that are encountered if the business is going to get started from scratch (i.e…
Author : vharris
International Finance & Capital Markets essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"International Finance & Capital Markets"
with a personal 20% discount.
Grab the best paper

Related Essays

International Capital Markets and Finance
Forward market is an OTC market where traders can buy or sell currency at a pre-specified rate for delivery on a pre-specified date. The exporter can sell the forward contract to hedge his/her receivables and the importer can buy forward contract to hedge his/her payables.
8 pages (2000 words) Essay
Impact of Market Imperfections on International Capital Markets
In addition there is no or insignificant transaction costs and the costs and benefits are the directly reflected in the prices (Capital). The sole objective of the market participants is to maximize the economic profits. When these conditions do not hold then there occur the imperfections in the market and the resultant gaps in the capital supply.
11 pages (2750 words) Essay
Behavioural Finance and the Efficiency of Capital Markets
Fama [Eugene Fama, University of Chicago] says behavioural economists made the same mistake in reverse: 'The fact some individuals might be irrational doesn't mean the market is inefficient.'" To understand Shiller and Fama better and help us critically evaluate the rationality of their arguments and conclusions, we need to explain their different assumptions and how they arrived at their conclusions.
11 pages (2750 words) Essay
International Finance - financial stability
The paper details its relevance in the global economy. It also analyzes and details factors that influence, and factors that articulate around international finance. To explain International finance it is the study pertaining to the dynamics of exchange rates, foreign investment, trade deficits, capital inflows, and how these affect international trade.
4 pages (1000 words) Essay
International Corporate Finance and Financial Markets
The risks involved in the international business and investments are huge. Taking the recent example of the slump in the economic statuses around the world, the recession and the losses being incurred by the
14 pages (3500 words) Essay
International Finance and Markets
In 1965 the Northern Rock Building Society was formed as a consequence of union between the two North East building societies. The bank was nationalized in 2008. In the year 2007, the country of
3 pages (750 words) Essay
International Corporate Finance and Financial Markets
This is reverberated by the increase in capital market integration taking place in the global market. This paper explores the significance of the international corporate finance and financial
2 pages (500 words) Essay
International Finance
As a result of these unexpected changes, financial results international are greatly affected. Attempts to minimize the exposure to the changes in exchange rates gives an option engagig in short term contracts of
3 pages (750 words) Essay
International Banking Law: Capital Markets and Loans
Farm Turbine plc. The company deals with the manufacturing of components which are required by the small scaled wind turbines. The two graduates namely Emma and Dan
16 pages (4000 words) Essay
Capital markets
This is usually done by taking out such a debt security as a loan, popularly confirmed by a note in addition to offering security to the lender. The most common form of a corporate debt security is referred to as a bond; which
8 pages (2000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation