January 3, 2012.Abstract This particular report will examine the acquisitions and merger between Vodafone and Telsim which is in turkey. The essay will therefore provide a financial analysis of the merger between the two companies. This is be achieved by the company making use of ratio analysis. This will be further achieved by calculating the existing changes in the financial positions of Vodafone Company and Telsim in both the post and pre merger period. Secondly, the report will examine the existing the changes regarding the two companies of the two companies during the post and pre merger periods by making use of non parametric approach.
Nonetheless, there was evident of significant alterations pertaining to shareholders’ earnings. However, pertaining to Vodafone and Telsim liquidity position, there was no significant change regarding the same (The economist, 2008, p. 56). The obtained analysis of the merger between Vodafone and Telsim in Turkey shows a clear indication that there is an essential correlation between the merger between the two firms and their financial performance. The report further analyses the key benefits of the merger in addition to the success of the merger between Vodafone and Telsim four years before and four years after the merger. In December 2007 Vodafone Company announced that it will take over Telsim which is the second largest mobile operator in Turkey.
Vodafone company the company using funds from Turkish savings deposit and investment fund for a sum amounting to us$ 4.55 billion. Financial analysis of the merger between Vodafone and Telsim CompanyIntroductionsStrategic acquisitions, alliances and merges have been embraced by a number of organizations and telecommunication sector is not an exception.
This has been further enhanced by the fact that high percentage of firms has the urge of improving their performance so that they can be strategically placed despite the existing competition. Thus the merger between Vodafone and Telsim company in turkey was motivate by the fact that Vodafone as a telecommunication company so the need to reduce not only the operation costs, increase investments, expand its operations globally but also to gain from the benefits of economies of scale and improve the value of the shareholders not only within turkey but also beyond its borders.
During the first years after the merger, Vodafone Company seemed to be preparing to handle any external competition (Brigham & Houston, 2009, p. 124). About VodafoneVodafone as a telecommunication is one of the first telecommunication company in the world. The company operates in 27 countries which are spread in 5 continents. In addition to that the company has 171 million proportionate customers in the whole. The aforementioned figures were as per 2005 report two years before the merger (www. vodafone. com). About TelsimBefore Telsim merged with Vodafone Telecommunication Company, it was regarded as the second largest GSM operator in turkey.
As per 2005 annual report the company had approximately 8.7M customers. The market of Telsim share was estimated to 21.4% according to the report that was released in 2005. In addition to that in 2004, Telsim as a telecommunication company generated EBITDA and revenue which totaled up to USD 87 million and 712 million respectively (www. telsim. com).