Financial analysis and management of international groups: Schneider vs Square D
Summary :
Table of Contents
- Presentation of the case
- Outlook of the industry
- The Schneider Group
- Square D
- Positioning on the global markets
- From a joint-venture to a 'friendly cash merger transaction'
- Questions about the case study
- Assumptions made by Lazard Freres for valuing Square D
- Square D's cost of equity
- Estimation of the value of Square D to Schneider based on Lazard's assumptions
- Price offered for Square D by Mr. Pineau-Valencienne
- Net income, Equity and ROE
- Goodwill asset arising from the acquisition of Square D
- Consequence of the future amortization of the goodwill asset for Mr. Pineau-Valencienne
- Conclusion
Abstract
The electrical equipment industry, which generates revenues from construction and maintenance, is closely related to the economic conditions. This sector is characterized by the globalization of markets, the concentration of firms, the standardization of products and increasing costs of development & production. The schneider Group, a French electrical manufacturer whose CEO is Didier Pineau-Valencienne has been restructured. It has conducted the following measures:
-Divest the loss-making businesses,
-Focus on the two segments: electrical building contracting and electrical equipment manufacturing,
-Geographical diversification through the acquisition of 15% stake in DAVY, an English engineering company, and a controlling interest in Federal Pioneer, a Canadian electrical equipment manufacturer.
-Divest the loss-making businesses,
-Focus on the two segments: electrical building contracting and electrical equipment manufacturing,
-Geographical diversification through the acquisition of 15% stake in DAVY, an English engineering company, and a controlling interest in Federal Pioneer, a Canadian electrical equipment manufacturer.
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