Subject category:
Human Resource Management / Organisational Behaviour
Published by:
Allied Business Academies
Length: 20 pages
Data source: Field research
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Abstract
The primary subject matter of this case concerns the cross-cultural negotiation of an earnout agreement between Denshi Global Holdings, a publicly-traded Japanese company, and Informatica de Sistemas, SA,(IDS) a private Spanish company that Denshi is seeking to acquire. Secondary issues examined include (1) the added dimension of complexity involved in cross-cultural negotiations, (2) the issue of a valuation gap that frequently is an issue of contention between the buyer and seller in an acquisition, (3) the structure of an earnout agreement to bridge the valuation gap and to resolve the issue of which party will take on the risk of that value based on whether or not future performance exists, (4) the psychological (and emotional) elements involved in an owner giving up his company or taking on new owners, and (5) the self-interest motivations of the parties that often enter into negotiations in either a direct or subtle manner. The case has a difficulty level of four, appropriate for senior level. The case is designed to be taught in three class hours and is expected to require three hours of outside preparation by students.
Location:
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Subject category:
Human Resource Management / Organisational Behaviour
Published by:
Allied Business Academies
Length: 20 pages
Data source: Field research
About
Abstract
The primary subject matter of this case concerns the cross-cultural negotiation of an earnout agreement between Denshi Global Holdings, a publicly-traded Japanese company, and Informatica de Sistemas, SA,(IDS) a private Spanish company that Denshi is seeking to acquire. Secondary issues examined include (1) the added dimension of complexity involved in cross-cultural negotiations, (2) the issue of a valuation gap that frequently is an issue of contention between the buyer and seller in an acquisition, (3) the structure of an earnout agreement to bridge the valuation gap and to resolve the issue of which party will take on the risk of that value based on whether or not future performance exists, (4) the psychological (and emotional) elements involved in an owner giving up his company or taking on new owners, and (5) the self-interest motivations of the parties that often enter into negotiations in either a direct or subtle manner. The case has a difficulty level of four, appropriate for senior level. The case is designed to be taught in three class hours and is expected to require three hours of outside preparation by students.
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Subject category:
Human Resource Management / Organisational Behaviour
Published by:
Allied Business Academies
Length: 20 pages
Data source: Field research