Morrisons and Safeway (Section A)

The motives for takeovers and mergers and how these link with corporate strategy

Morrisons, which was mainly based in the North, wanted to access the South of the UK and Scotland; Safeway provided this opportunity as they accounted for 40% of total floor space in Scotland and established within the South 

Morrisons also wanted to increase market share within the UK to reduce the threat of themselves been acquired by a competitor 

The problems of takeovers and mergers including the difficulties integrating businesses successfully

Morrisons, due to the takeover, now reported their first ever loss of £313 million due to spending £3 billion on the takeover

In order to reduce costs, they cut staff working hours by 3% saving £90 million a year 

Safeway sales were down 7.2% but Morrisons sales grew by 9.2%

Taking into account the market share of each business before the takeover, the new business's market share fell from 14.8% to 14.1%

The factors influencing the success of takeovers and mergers

Morrisons were able to withstand the short term losses post-acquisition because they had a strong financial position 

Whether Morrisons can actually save up to £215 million each year in cost saving post-acquisition

The impact of takeovers and mergers on the performance of the businesses

The initial impact was disappointing  because Safeway had just changed their accounting system 6 weeks before 

Between 2005 and 2006 there was a substantial increase in sales revenue from £4.9 billion to £12.1 billion - But pretax profits fell from £319.9 million to £193 million 

Morrisons reported their first even loss of £313 million (saw in 2006)

Not bothering during the last two bullet points :/ Sorry