Should the government permit mergers and acquisitions?
What is your impression of the digicel/claro merger in the Caribbean? Were the workers’ rights respected and did the shareholders meet their responsibilities?
Merger & Acquisition
This is when two companies combine to form a single company; a merger is very similar to an acquisition except that the existing stockholders or both companies involved retain a shared interest in the new corporation.
I think the Government should permit mergers and acquisitions because a Corporation between a merger and acquisition can gain a large incremental amount increase in the market share which will improve economics of scale and acquire new technology and expertise.
The consumer’s acquisition will enable digicel to offer wider variety of services when it gets the exclusive rights to distribute for example its iphone and ipad technology. However positions Digicel to monopolize the telecom market as Lime is in no position to compete, financially. There are several consequences of monopoly:
* Digicel relieved a lot of the Claro employees of their job
* Impact- cheap outsourcing of some jobs, robbing Jamaicans of jobs
* Digicel don’t have the infrastructure to support the added customers from Claro results in poor service like no connection, dropped calls, etc.
In many cases, workers who are laid off due to a merger or acquisition are offered various tools and resources by either the old employer or the new company. These may include things like career counseling, resume services, and outplacement and job search assistance.
Digicel offered Enhanced Separation Programme – this is significantly more generous than what is legally required providing all employees with an extra four weeks of pay above what is required and continuing healthcare, lunch allowances and phone credit benefits for a period of three months. In addition, we will be providing outplacement services and encouraging...