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Case
-
Reference no. 393-005-1
Published by: INSEAD
Published in: 1993
Length: 26 pages
Data source: Published sources

Abstract

The ICI case describes the events of May 14, 1991, when the company is under the shadow of a Hanson threat. A historical perspective conveys the company''s national, if not "imperial", character; the importance of research and synergies across businesses in the genesis of new, chemical-based businesses; the importance of vertical integration in their competitiveness; the globalisation of the world chemical industry; and the inherently cyclical nature of the industry. The case goes on to describe the changes brought to ICI by Sir John Harvey-Jones in the 1980s. This is followed by a description of the restructuring under way at the time of the Hanson bid. The case concludes with some of the arguments surrounding ICI''s performance, the extent of synergies in practice, the importance of R&D, as well as the political dimension of this prospective takeover. Teaching objectives are to examine and contrast the corporate strategy of respectively acquisitive conglomerates and diversified industrial companies; to explore how each creates economic value and to examine the sustainability of such value creation; to examine and contrast the administrative approach and corporate influence mechanisms of conglomerates and diversified industrials; and to explore the public policy issues raised by hostile takeovers and corporate restructuring. May be used with Hanson Plc (393-004-1).
Location:
Industry:
Size:
GBP13 billion
Other setting(s):
1991

About

Abstract

The ICI case describes the events of May 14, 1991, when the company is under the shadow of a Hanson threat. A historical perspective conveys the company''s national, if not "imperial", character; the importance of research and synergies across businesses in the genesis of new, chemical-based businesses; the importance of vertical integration in their competitiveness; the globalisation of the world chemical industry; and the inherently cyclical nature of the industry. The case goes on to describe the changes brought to ICI by Sir John Harvey-Jones in the 1980s. This is followed by a description of the restructuring under way at the time of the Hanson bid. The case concludes with some of the arguments surrounding ICI''s performance, the extent of synergies in practice, the importance of R&D, as well as the political dimension of this prospective takeover. Teaching objectives are to examine and contrast the corporate strategy of respectively acquisitive conglomerates and diversified industrial companies; to explore how each creates economic value and to examine the sustainability of such value creation; to examine and contrast the administrative approach and corporate influence mechanisms of conglomerates and diversified industrials; and to explore the public policy issues raised by hostile takeovers and corporate restructuring. May be used with Hanson Plc (393-004-1).

Settings

Location:
Industry:
Size:
GBP13 billion
Other setting(s):
1991

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