TNT however, needs to acquire Fastpack. As mentioned above, it is quite difficult for foreign companies to enter the Ruritanian courier market. The best way of succeeding would be to acquire a well-known local company. Therefore, it might be a better solution for both companies, and especially for Fastpack, to decide upon a merger between the two companies rather than on an acquisition of Fastpack by TNT.

Initial Valuation of the Company Acquired by TNT

Objective: the purpose of the acquisition of Fastpack where TNT is concerned consists in entering the Ruritanian courier market. As mentioned above, the only solution that guarantees success for foreign companies entering Ruritania's courier market consists in acquiring a local, well-positioned courier company like Fastpack. Also, this would help TNT to consolidate its position on the international market.

The environmental context

The current macroeconomic conditions recommend this acquisition of a courier company by TNT. The Ruritanian courier, express, and parcel delivery market is in full development process. This is a great moment for investing in this market. There is still room for new investors on this market and TNT should exploit this opportunity.

The internal context

Fastpack is organized in a very flexible manner. This allows the company to move fast on the market and to satisfy as many customers and as fast as possible. Such a flexible organization allows for an easy takeover by TNT.

Fastpack is owned by individuals. This would make the transition easier and the acquisition could take place in a shorter period of time than usual. The objectives of the company management includes: upgrading the existing billing system, developing billing applications for branches, developing software for settlement with branches, developing software for settlements with couriers, introducing electronic archiving, supporting the customer data base (Executive Summary, 2008).

These objectives of the company's actual management do not interfere in any way with TNT's objectives. Even more, this would help TNT to attain its objectives regarding the Ruritanian courier...

Entering the Ruritanian market would be a great opportunity for TNT to expand its activity worldwide. If TNT were to acquire a solid position in this country, it would allow the company to expand its business in Ruritania's neighboring countries in Eastern Europe.
Ruritania present tremendous growth opportunities regarding the courier market. TNT would have difficulties on entering this market as a foreign company. This is why TNT needs to acquire Fastpack. By acquiring Fastpack, TNT is acquiring its position on the Ruritanian market. Even more, TNT would benefit on international level from this acquisition, given the 5% market share owned by Fastpack on the international market.

This acquisition would follow a trend established in the global economy, since "the level of cross-border acquisitions doesn't seem to be related at all to the level of various currencies. The number and value of international transactions doesn't rise or fall depending on whether the dollar is weak or strong. Companies usually pursue cross-border acquisitions for strategic and competitive reasons" (Platt, 2004).

This acquisition is recommended in order to avoid problems like rival bidders, cultural and language barriers that can generate uncertainty, and other subjective matters that affect negotiations in such situations (Finkelstein, 2008). If TNT does not start the negotiations for acquiring Fastpack, it is expected that other bidders that want to enter the Ruritanian courier market will manifest their interest in Fastpack, which will probably result into more difficult negotiations.

Reference List

Summary Balance Sheets (2008). Retrieved January 22, 2009.

Executive Summary (2008). Retrieved January 23, 2009.

Platt, Gordon (2004). Cross-Border Mergers Show Rising Trend as Global Economy Expands. Global Finance. Retrieved January 23, 2009 at http://findarticles.com/p/articles/mi_qa3715/is_200412/ai_n9466795.

Finkelstein, Sydney (2008). Cross Border Mergers and…