Recent Posts


  • Top Banana: ChiquitaFyffes

    Source: Chiquita of the United States and Fyffes of Ireland have agreed to merge and form the world's number one banana supplier, ChiquitaFyffes. Fyffes is Europe's oldest industry brand beginning in 1929. See attached information about the history of the Fyffes brand. “This is a milestone transaction for Chiquita and Fyffes that brings together the best of both companies which, we believe, will create significant value for our shareholders and offer immediate benefits for customers and consumers worldwide,” said Ed Lonergan, Chiquita’s Chief Executive Officer. “This is a natural strategic partnership that combines two complementary companies of long history and great reputations that have built upon an unwavering commitment to exceed our customers’ expectations. We will maintain our brands, all of which are valued by both customers and consumers. The combined company will also be able to provide customers with a more diverse product mix and choice. We know Fyffes well and our shared heritage will help to ensure a smooth integration as we work to bring best practices across geographies and business units to achieve substantial operating efficiencies.” David McCann, Fyffes' chairman will become Chief executive and Ed Lonergan will become chairman of ChiquitaFyffes. The merger will generate $40 million in pre-tax savings through more efficient operations. The merger must be approved by antitrust officials in the United States and the European Union. Research the two companies. What might keep the merger from happening?
  • Facebook Buys WhatsApp for $19 Billion

    Facebook's acquisition of WhatsApp, a mobile messaging service, for $19 billion has shocked many people. WhatsApp has 50 employees, but more than 450 million monthly users. Many use the app to text friends and family in other countries. Most users pay $1 for the app. In the video above, people are asking, "Why is WhatsApp worth $19 billion?" CNN reports, "In short, with this acquisition, Facebook is getting the most popular mobile social messaging app in the whole world." Do you use Facebook? Do you use WhatsApp? Younger people have been leaving Facebook. Will the acquisition of WhatsApp help Facebook retain those users? Will WhatsApp help Facebook recruit new users?
  • Yahoo Buys Tumblr

    CBS MoneyWatch reports , "Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," Yahoo said in an unusual pledge for a formal acquisition announcement. Tumblr founder and CEO David Karp will continue on in his role. Yahoo said the "service and brand will continue to be defined and developed separately with the same Tumblr irreverence, wit, and commitment to empower creators." Do you have a Tumblr account? Do you have a Yahoo email address? Which Internet sites do you visit regularly? What does Tumblr have that Yahoo needs? Is buying "hip" Tumblr a good management decision for "old" Yahoo? Explain.
  • American Airlines and US Airways Announce Merger

    Yesterday, American Airlines and US Airways announced plans to merge and become the largest airline. (See American CEO Tom Horton's email to me below.) A merger means that the companies must consolidate their systems and structures. The merger has different implications for employees and managers. The employees will get more compensation and opportunities. The new airline will be based in Texas, not in Arizona. Only one set of managers will be needed, so managers will lose their jobs. Mr. Horton will lose his job as CEO, but will remain as chairman of the board. What changes might travelers see? How will the merger affect customer satisfaction? ---- Dear Gemmy Allen, Today is a historic day as American Airlines and US Airways announce plans to create the new American Airlines. Together, we will create a premier global carrier with an expanded worldwide network, a strong financial foundation, a modern and efficient fleet, and the industry's best team of people who will offer an unparalleled travel experience for our customers. Over the past few months, we conducted a thorough review of alternatives to strengthen American for the future and determined that this combination delivers the most value for our stakeholders and the best outcome for our customers and people. As a combined carrier - the new American - we will have an expanded network to even better match where customers want to fly and enhanced ability to invest in our fleet, modern technologies, and the products and services our customers value most. We've been making progress toward building a new American - from transforming our fleet with the largest aircraft order in history, to modernizing the travel experience, and refreshing our iconic brand. This merger is our next step in the process of building the leading global airline. American and US Airways combine two highly complementary networks with access to the best destinations throughout the U.S. and around the globe. Together we will offer our customers more than 6,700 daily flights to 336 destinations in 56 countries by maintaining all the hubs currently served by both airlines. When the new American arrives, we will provide more options than any other airline across the East Coast and Central U.S. regions, and expand and further strengthen our network on the West Coast. The combined airline will add to our reach across the Atlantic and Pacific and bolster American's industry-leading position in Latin America and the Caribbean. We'll also enhance our existing loyalty program benefits through expanded opportunities to earn and redeem miles across the combined network. The new American will continue to give customers options for travel and benefits both domestically and internationally through continued membership in the one world ® Alliance. As they do today, our one world Alliance partners will offer access to a range of destinations, airline choices, and earning and redemption opportunities. At this time, American and US Airways will remain separate companies and you can continue to count on American for excellent service and safe, reliable travel. We expect the merger to be completed in the third quarter of 2013 and will keep you updated. I invite you to visit to keep up with our progress. Both American and US Airways are distinguished by our proud histories and look forward to our bright future as we build the world's leading airline. Thank you for your continued loyalty, and we look forward to welcoming you aboard soon! Sincerely, Thomas W. Horton Chairman & CEO
  • AT&T and T-Mobile Hang Up

    German based Deutsche Telekom AG wants to sell T-Mobile USA. AT&T wanted to merge with T-Mobile to improve its cellphone network. However, the Federal Communications Commission ( FCC ) and the Department of Justice were against the merger. AT&T and Deutsche Telekom withdrew their merger application from the FCC after the FCC released a staff report concluding that the merger was not in the public's interest because it would be likely to lead to higher prices, fewer jobs, less innovation, and overconcentration of market share and wireless spectrum among remaining competitors. But, Jim Cicconi, AT&T Senior Executive Vice President of External & Legislative Affairs, posted a rebuttal to the FCC on AT&T's public policy blog . The companies turned their focus on the antitrust lawsuit filed by the Department of Justice. The Justice Department reported, "On Aug. 31, 2011, the Justice Department filed a lawsuit in U.S. District Court for the District of Columbia, to block the transaction, which would have combined two of the only four wireless carriers with nationwide networks. State attorneys general from California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, Puerto Rico and Washington joined the United States as co-plaintiffs. The department coordinated its review of the proposed transaction with the Federal Communications Commission." On Monday, December 19, 2011, the Justice Department issued the following statements . Deputy Attorney General Cole said, "This result is a victory for the millions of Americans who use mobile wireless telecommunications services. A significant competitor remains in the marketplace and consumers will benefit from a quick resolution of this matter without the unnecessary expense of taxpayer money and government resources." Acting Assistant Attorney General Pozen said, "Consumers won today. Had AT&T acquired T-Mobile, consumers in the wireless marketplace would have faced higher prices and reduced innovation. We sued to protect consumers who rely on competition in this important industry. With the parties' abandonment, we achieved that result." The Wall Street Journal reported that "The deal's failure is a setback for AT&T's top executives, who exuded confidence about the takeover beginning with its announcement on March 20. For Mr. Stephenson, AT&T's CEO, the bid for T-Mobile was the biggest gamble in a tenure devoid of the sort of blockbuster deals that were a hallmark of his predecessor, Ed Whitacre. Mr. Whitacre created today's AT&T over more than a decade of deal-making that pieced together fragments of Ma Bell and rolled up several wireless companies." Now, T-Mobile will look for another buyer, and AT&T does not have access to a wireless-spectrum network. It will take years for AT&T to build it. Consumers could benefit if wireless services were more accessible. The merger would have made AT&T bigger, but is big always bad? When is big good? Jobs might have been lost, but moving data quickly and affordably could result in new jobs. How could economies of scale and other technological and procedural efficiencies have led to new products and services?
  • Bankrupt but Business as Usual

    Braniff Airplane and Flight Attendants Last Tuesday, I received an email from American Airlines announcing that even though it had filed for bankruptcy, "it will be business as usual at American throughout our reorganization process." (See a copy of the email attached.) I live near the Dallas/Fort Worth (DFW) International Airport. American Airlines is based here and is one of the largest employers in the area. So far, employees have kept their jobs and passengers have been served. It does seem like business as usual. Also, I lived here in 1982 when Braniff declared bankruptcy. Braniff used the slogan " When you've got it, flaunt it " in one advertising campaign. Many thought that saying rang true for Braniff. Management was known as innovative. The company was the first to have colorful airplanes and Pucci and Halston designed flight attendant uniforms. Immediately upon declaring bankruptcy, Braniff ceased operations, leaving about 10,000 employees out of work. Customers were stranded with worthless tickets and had to buy tickets on other airlines. Most employees could not find comparable work for many years, if ever. It was a painful time for employees, as well as the DFW area. Today, bankruptcy no longer means a company will cease to exist. Other airlines that have declared bankruptcy include America West, Continental, United, US Airways, Delta, and Northwest. Subsequently, US Airways merged with America West; Delta merged with Northwest; and United merged with Continental. Now, all are profitable. Bankruptcy should help American Airlines achieve competitive costs. But, the customer must be satisfied in order for American to become successful. As a customer, what kind of air travel experience do you want? What would you recommend to improve the customer's experience to American's management?