Drug firms in $41bn giant merger

Level 1: Knowledge
1a) Describe the following words or terms

• Merger


• Inorganic Growth


• Organic Growth


• Pharmaceutical Company

Level 2: Application
2a) I own 10,000 shares in Schering Plough. Calculate what I can expect to receive as a result of the merger.
2b) What type of growth strategy does this merger represent? Use your textbook and/or my notes construct a table showing the advantages and disadvantages of such a merger.

Level 3: Analysis
3) Use the information in this article to analyse the statement made by Merck Chairman and CEO Richard Clark, who said "We are creating a strong, global healthcare leader built for sustainable growth and success"

Level 4: Evaluation
4) Should I buy shares in the merged business? Justify your answer!

Note Level 1 – Level 4 are questions based on IB standards where

Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website

BA exploring merger with Qantas

These BBC articles provide background on a possible merger between British Airways (BA) and the Australian National Airline (Qantas). Read them and answer the following questions.

07/11/08 - Profits plunge at British Airways.
Q1a) British AiBritish Airways made a pre tax profit for BA in the 6 month period April to September 2008 of £52m ($UDS81.6m). That’s good – right?
Q1b) What factors mentioned in the article have affected BA’s profits?
Q1c) Explain why recent changes in oil prices are good or bad news for BA.

07/12/08 BA exploring merger with Qantas
Q2a) What political decisions have been made to allow the possibility of a merger between BA and Qantas
Q2b) What Special Intereest Groups are mentioned in the article. How does it feel about this proposed merger?

08/12/08 Qantas boss says BA deal in doubt
Q3a) Explain the statement “current pension liabilities, which stand at about £1.5bn ($2.2bn) as a possible hurdle for the talks”