Proposed International Business Acquisition
Review the requirements of the Final Assignment in Week Six. This Week One assignment is the first step in creating the comprehensive Final Proposal that will be due in Week Six. Carefully select the three countries you will chose to analyze because you will be using these countries throughout the course.
Dorchester, Inc. is a U.S. based conglomerate. They have seen a marked trend towards their competition expanding operations internationally. Dorchester, Inc. is interested in purchasing a company that specializes in consumer electronics.
Research three potential takeover targets that are based in three different countries and have substantial operations overseas. Provide a four to five page (excluding title and reference pages) economic assessment to Dorchester, Inc. management regarding the pros and cons of buying a company that is based in each of the three countries. Use non-course materials to support your contentions and supporting documentation as necessary.
Predicting Exchange Rates
Dorchester, Inc has asked you to help forecast exchange rates for the three potential countries you have selected for your proposal.
In a four to five page paper (excluding title and reference pages), plot the exchange rates from the past year in each of the three countries. Identify and describe any patterns that can be seen. What are the possible explanations for these patterns? What exchange rates do you predict for 1 year from now?
Designing an Exchange Management Program
Review the “Case Application” at the end of Chapter 9: Exchange Risk Management at Merck. Using the 5-step process outlined, develop your own 5-step program for managing exchange risk for your proposed acquisition.
Interest Rate Swap provides a brief description of interest rate swaps. Review the Interest Rate Swap Article and design a swap that could potentially be used in your company acquisition.
Provide an analysis to Dorchester, Inc. management advising them of the swap options you have selected and why it would be suitable for the acquisition.
Focus of the Final Proposal
Using the material developed for Weeks One through Five, write a fifteen to twenty page proposal to Dorchester, Ltd.’s management team. In your proposal, advise them of an acquisition target based on research previously conducted. Your proposal should also include:
- An economic assessment of the country chosen,
- A risk mitigation plan,
- A financing plan on how to finance the acquisition, and
- A concluding recommendation using supporting rationale derived from the above mentioned items.
Use non-course materials to support your contentions and incorporate pro forma financial statements and supporting documentation to support your proposal.
Writing the Final Proposal
- Must include an introductory paragraph with a succinct thesis statement.
- Must address the topic of the paper with critical thought.
- Must conclude with a restatement of the thesis and a conclusion paragraph.