Browse Case Studies by
Case Studies in
- Corporate Governance
- Corporate Social Responsibility
- Economics
- Entrepreneurship
- Finance, Accounting & Control
- Leadership
- Marketing
- Organisational Behaviour / HRM
- Social Entrepreneurship
- Strategy
- All Case Studies »
Concept wise Case Studies
- Mergers, Acquisitions and Alliances - Vol. I
- Mergers, Acquisitions and Alliances - Vol. II
- Mergers, Acquisitions and Alliances - Vol. III
- Mergers, Acquisitions and Alliances - Vol. IV
- Airline Industry
- » All Concept wise Cases
Industry wise Case Studies
- Banking and Financing Services
- Retailing
- Energy and Utilities
- Oil and Gas Refining, Marketing and Distribution
- Commercial Aircraft Manufacturing
- » All Industry wise Cases
Region wise Case Studies
Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
Breaking Alliance With Fiat : Gain for GM?
Publication Year : 2005
Authors: G. Saradhi Kumar, Sumit Kumar Chaudhuri
Industry: Automobiles
Region: USA
Case Code: MAA0038
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
In 2000, General Motors’ (GM) rival, DaimlerChrysler, was planning to takeover Fiat. To keep its rival at bay, GM entered into an alliance with Fiat. The agreement included a put option clause for Fiat that could force GM to buy out Fiat, irrespective of GM's interests, any time between 2004 and 2009. In January 2005, when Fiat wanted to exercise its put option, GM refused to buy Fiat. Under such circumstances, the alliance was broken and GM had to pay Fiat $2 billion as an exit fee.
Pedagogical Objectives:
- To discuss the benefits that GM derived out of the episode that cost the company a total of $4 billion – initial investment plus the price to pull itself out of the put option.
Keywords : Fiat;Mergers,Acquisitions,Alliances Case Study; General Motors (GM); Put option; GM in Europe; Ford Motor Company; DaimlerChrysler merger; Global alliances; Mergers and acquisitions; Synergies in alliances; Breaking-up of alliances; Global automotive industry
