Multinational Acquisition Research Paper Example | Topics and Well Written Essays - 1750 words

Multinational encyclopaedism - Research Paper ExampleIn 2010, the world witnessed the learning of a famous international conjunction Cadbury by Kraft Food Products. Kraft Foods, an American multinational, which deals in food products acquired Cadbury, a British multinational dealing in confectionary products, as a way to diversify its holdings. As such, in January 2010, Kraft Foods acquired Cadbury for ?11.9 billion ($19.6 billion) (Merced & Nicholson, 2010). This made Kraft Foods the biggest confectioner in the world. It has been recorded as the biggest food and beverage deal in European history according Reuters. The initial offer of Kraft Foods was 745p, per shargon which was increase by 14 percent to 850p per share. Initially the acquisition was opposed by the trade unions because they had the prescient concern that such an acquisition would necessarily lead to job cuts. However, Kraft Foods confirmed that the combined company would be able to construct more jobs in UK, apa rt from the existing employees that Cadbury currently employed (Jones, & Dorfman, 2010). Research Objectives The objective of this look into is to localise on the issues that ascend after a multinational acquisition acquires a different organizational culture, framework, answer and system in comparison to the company which has acquired it. The motive would be to analyze the accounting requirements after acquisition, difficulties that arise with reference to preparation of combined pecuniary statements, as well as to separately assess the good will of the business compounding and other key issues. The objective would also be to study the IFRS and GAAP guidelines which are applicable in cases such as the one that will be studied. Outline of the Study The research study includes a detailed study of the multinational acquisition of Cadbury by Kraft Foods. General abridgment of the scenario before acquisition is done furthermore, the study will discuss the after effects of acquisi tion deep down the new business combination. As such, the study will begin with a brief overview of the acquisition that took redact in January 2010. The research objective is stated to describe the motive behind conducting the research. Furthermore, a literature revaluation will include analysis of the accounting requirements and the challenges faced by the company in preparing the combined financial statements. Apart from this discussion on the process of evaluating the intangible assets of the company and key changes that are made in the acquired company would be revealed, the study will attempt to give a complete view of the fortunate objectives required by such an approach. LITERATURE REVIEW Accounting Requirements and Challenges in preparing Financial Statement In the case of the acquisition of Cadbury by Kraft Foods, the holding company is Kraft Foods and Cadbury is the subsidiary. Therefore, the companies in this business combination need to apply for acquisition accounti ng to the newly united business. Similarly, the holding company is the one which holds legal age of the shares of the subsidiary company. The holding company must also become responsible for the balance sheet and realize and loss statements of the subsidiar