Corporate finace Essay Example | Topics and Well Written Essays - 2000 words

Corporate finace - Essay Example Online Travel Portal Limited used to be the former name of Opodo Limited prior to July 2001. It is a subsidiary of Amadeus IT Holding, South Africa. However, it is based in London, UK and was incorporated in the year 2000. The Financial Times reported that Permira Advisers Ltd. and AXA Private Equity seem to join hands together for the purpose of buying Opodo Limited from Amadeus IT Holding SA at the cost of â‚ ¬500 million that is equal to USD 682.5 million. The prime objective of the planned buyout is to develop the best online booking services provider through merging the Opodo Limited with the eFreame and Go Voyages SA. Also, the American Carlyle Group has shown some intend to buy Opodo limited due to which the bids for Opodo exceeded â‚ ¬400 million since any bid would probably be challenged by Carlyle Group. Some sources reported that the Permira would bid through Vacaciones eDreams, S.L. where as the Axa would be bidding through Go Voyages SA. The process of this sale wi ll be handled by the JPMorgan Chase. Permira and Axa have been bidding against each other for the acquisition of medium sized European web based travel agencies prior to joining together so as to acquire Opodo Limited. In the last year, Permira defeated Axa so as to acquire eDreams-Spanish online agency where as the Axa won against Permira for the acquisition of Go Voyages. After which they together planned to develop a giant European agency through merging the Opodo Limited, after its acquisition if their bid for it is successful, with the previously acquired eDreams and Go Voyages. At present, the Amadeus IT Holding owns the Opodo Limited and this business venture involves only 4 % of their entire business turnover. Financial Performance Indicators Financial performance indicators for the three companies are provided below. Chart 1: Annual Sales Permira Advisers Ltd for the Last 5 Years in Million USD. The chart 1 given above provides interesting information about the annual sales of the Permira Advisers Ltd that enables us to apprehend the performance of the company before the acquisition of OPODO Limited. Chart 2: Annual Sales AXA Private Equity for the Last 5 Years in Million USD. The chart 2 given above provides interesting information about the annual sales of the AXA Private Equity that enables us to apprehend the performance of the company before the acquisition of OPODO Limited. Chart 3: Annual Sales OPODO Limited for the Last 5 Years in Million USD. The chart provides interesting information about the annual sales of the OPODO Limited that enables us to apprehend the performance of the company before its acquisition. Due to the above performance of Opodo, other companies are interested towards its acquisition. Why Are Mergers & Acquisitions Interesting? The most important factor for the mergers and acquisitions is the existence of "synergies" that enables the two companies to operate more efficiently together in comparison to be working individually . Nevertheless in some cases, organization may obtain tax benefits from a merger or acquisition. 'Horizontal' mergers that take place between companies functioning in the same industry at the same production level may also be instigated through the wish for greater market power, as in the current case of OPODO acquisition by the Permira and AXA (being merged together). Also,