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Critical Review for the Article EssayThe electronic journal entitled The Long-Term Performance of Horizontal science, by Laurence Capron of the Institut Europeen dAdministration des Affaires (INSEAD), published in 1999 by the Wiley and Sons publishing, has studied the creation of flat mergers and achievement. In Caprons paper, he dated his studies from mid-1980s to early on 1990s financing strategies of business theatres in divesting and liquidating its assets which he referred as the horizontal mergers and acquisition.Capron has cited about 253 firms in Europe and America that patterns the financing strategies. fit in to Capron (1999), tryout reveals divestment of assets and corking infusion (re-financing of liquidated assets) makes effective to acquisition cognitive process, but could have potentially detrimental impact. As what Capron emphasized on the performance of acquisition based on divestment and redeployment (re-acquisition) of resources, his study examines t he defects and compliments on effective room in horizontal mergers and acquisition.Key points and rationale As reviewed from the journal, the horizontal acquisitions whitethorn be exemplified as a means and strategy in establishing the resource-divestment intention, in which by doing so, it optimizes or exploits the values of cost-based and revenue-based synergies (Capron 1999 p. 988). As explained, it may be comprehend that the synergy patterns the continue acquirement of business values, as a result of divestment wherein encounter of the newly diversified firm or business values acquires more assets and capital budget.harmonize to Capron (1999), the cost efficiency theory emphasizes on the significance of cost-based synergies that occur when assets have been divested resulting the integration of cost-saving measures. Thus, the firm performs effectively in enhancing its revenues that synergizes with the redistribution of the capital towards an enhanced capability. It may be an alyzed from the findings of Capron that the 1980s and 1990s rapid growth of industries brought about by globalization have emerged more coronations in the supply chain.One of which is the positioning of authentic and high-end industries within raw material sources. Like, for example, diversification process has been developed in Asian countries wherein more investment in cheap raw materials and labor ar available and can be acquired easily. The horizontal acquisition could be drawn from establishing partnership, subsidiary in operation, joint ventures and inter-dependency in export and import schemes. Hence, for example come with A has divested in establishing Company B to engage in tire manufacturing that source out the cheapest raw materials.In which case, a diversified industrial firm could venture out into versatile business values that optimize capital investments for a larger revenue generation translated into cost effectiveness that means comforting profitability. In Cap rons finding, the so-called parsimony of scale became the bases of diversification process that paved the way to a large-scale industrialization. The 20th century practice of the economy of scale has favored more industries to capture the investment areas, specifically in poor countries.The dispensation of merging through open-ended stockholding in small-medium-large enterprisingnesss units has put evidentiary relevance in acquiring industrial partnership, wherein capital investment has a critical role in merging companies. As cited from Caprons findings, the logical frugal explanation is capturing revenue-based synergies which are commonly identified as allocating and complementing resources by providing fondness competencies or mobilizing invisible assets (Penrose 1959 in Capron 1999 p. 989).As cited, Capron also pointed out in his suppositious model of post-acquisition and target redeployment (Capron 1999 pp. 990-995). According to Capron, the theory describes the diversifi cation process as focusing on (1) asset divestiture, (2) cost-saving, (3) resource redeployment, and (4) revenue-enhancing capabilities as an effective means of acquisition performance (Capron 1999 p. 992). The theoretical model refers to and explains the basic economic behavior as outlined in the acquisition performance.Capron further theorized that capabilities in a divested firm are being distributed as an organizational undertaking. Meaning, it can be explained that the schema of corporate governance and human resources are distributed or being shared that composes the acquisition performance. However, key organic elements were emphasized to have been integrated in the divestment process, in which the re-deployment (or deployment) of the organizational system or setting are acquired. ConclusionCaprons examination on the horizontal acquisition and projection of model in strategic post-acquisition and redeployment could be understood as a fundamental undertaking in diversificatio n process. It may be true that most of merging firms in their acquired assets or business are mainly distributing their in-placed organizational or corporate system. However, the merging firms could likewise optimize or streamline the existing organizational set-up, which is the common occurrence in most firms that undertaken a buy-out.It may be perceived that the revenue-generation could be largely acquired into options by streamlining the existing organizational set-up or re-organizing both human and capital resources. Caprons findings have emphasized more on the performance capability on the theory of horizontal acquisition referring only to capital budget, as implied on the capital resources or immovable assets of the firms. The human resource formula as a critical unit of the post-acquisition process may have not been well emphasized.What has been generally discussed in the study is the transformative business value in divestment schemes referring to capital investments and f ixed asset liquidation. It could be reflected that the capital investment and fixed asset liquidation are the critical factors in the divestment schemes as the primary resource of merging stakeholder. It could be suggested that the potentially detrimental impact as also pointed out by Capron could be referred to the human resources or labor force in a diversified industry.The merging stakeholder in Caprons findings were much given relevance on how they could effectively perform in targeting their post-acquisition and redeployment, in which the study itself envisions to complement the performance capabilities of the stakeholders. At this point, we may re-examine Caprons theoretical model as giving more weight to the envisioning of transnational and multi-national enterprises in furtherance of globalization, in which the continuing divestment scheme competes in the large scale economy of labor market and capital build-up.We may then conclude that Caprons findings could be re-examined with further studies relating to human resources re-deployment or deployment on its horizontal development complementing the diversification of industries, in which the parallelism envisions both human and capital divestment. Section B Morrisons bid to Safeway The electronic clipping of the Financial times on its December 8th 2003 issue at the www. ft. com web site has published the news article of Richard Milne entitled Countdown Starts for Morrisons Bid for Safeway.According to the news article, the Morrison Supermarket bided 21 days from its competitors, such as Tesco, J. Sainsbury and Asda-WalMart, following the UK governments reach out to sell the Safeway supermarket. The UK Department of Trade and Industry disclosed that Morrison was unforced to sell its 53 stores if acquisition of Safeway is successful (Richard Milne 2003 in Ft. com 2008). Morrisons negotiation was favored by the UK Competition Commission that disqualified the three major competitors from the control and upheld Morrison to takeover Safeway with a share of 219-1/2 from the 279-1/2, in which Safeway acknowledged the buy out.In a follow up report in 2004, after a year of the buy out, the Safeway has gained 40% of sales growth. Financial analysts claimed that Safeway has migrated customers to Morrison supermarket, as it cited that quality of sales has gone better because Morrison has stopped the Safeway policy of rolling deep discounts (Martin Dickson 2004 in Ft. com 2008). Perception of the issue Morrisons takeover of Safeway supermarket has gauged the situation of significant fiscal divestment venture.The business potentials of Safeway being an established supermarket that solely competes with Tesco, J. Sainsbury and Asda-WalMart were the strong intent of monetary divestment of Morrison to even offer the sell of its 53 stores. The financial divestment of Morrison could be relating Caprons findings on the horizontal acquisition of merging stakeholders by way of capital investments th rough diversified assets. In which case, the Safeway supermarket has found by Morrison as a potential divestiture that shall absorb the vulnerability from tough competitors.The merging of stakeholder through a buy-out or takeover of an established investment like Safeway may have validated Caprons theory of post-acquisition and redeployment, in which Morrison has able to contain the migratory customers and could further develop the acquisition performance of divesting financial investments. The divestment process of Morrisons takeover to Safeway has likewise described Caprons finding on merging firms that engages in the economy of scale. One that Morrison has learned from the Safeways enterprise approach on rolling deep discounts, wherein it found to be defeating the selling schemes.Thus, managing the risks in horizontal acquisition has gained Morrisons capability to undertake strategic competitor that transformed the old Morrison business through the new outfit of Safeway supermar ket. It may be then generally perceived that Caprons theory on horizontal acquisition has transformative business value in enhancing the financial investment and liquidating a frozen asset like Morrisons 53 stores that are non-performing, of which a unilateral financial divestment scheme in managing risk investment, that is vulnerable to tightened competition, gains flexibility upon acquiring an established business venture.However, this assumption is perceptive of a challenge to the continuing financial divestment of core industries in the global market. List of References Capron, L. (1999) The Long-Term Performance of Horizontal Acquisition. Strategic Management Journal, pp. 987-1018, John Wiley Sons, Ltd. , CCC 0143 2095/99/11098732. Dickson, M. (2004). Companies UK Safeway Sale. The Financial Times (2008). onlineavailable from http//search. ft. com/ftArticle? queryText=Morrison%E2%80%99s+takeover+of+Safe wayy=3aje=truex=16id=040521002246ct=0 14 June 2008 Milne, R. (2003). Coun tdown Starts for Morrisons Bid for Safeway. The Financial Times (2008). online available from http//search. ft. com/ftArticle? queryText=Morrison%E2%80%99s+takeover+of+Safe wayy=3aje=truex=16id=031208004508ct=0 14 June 2008