Industry change. The major production in both of TCL and Flat-panel TV and TVs could support DVD and digital television screen are shared more and more market share. Clearly, the industry is facing a profound change to the high-technology. Also, networks become the next generation. The distinction between fixed and mobile networks is becoming increasingly blurred. As wireless networks adopt advanced, high-capacity technologies, they are adding video services to voice and internet offerings. This is changing the competitive environment not only for wireless network operators, but also for content providers seeking to benefit from a new outlet for their programming.
Thomson’s brand in Europe and its RCA brand in America are rather …show more content…
It didn’t know the market in France, didn’t know if its production will fit for the foreign market, didn’t know the business environment, even the appraisal report showed too much risk during the merger, however, just want to achieve the extending plan, TCL continued acquire companies all over the world, without thinking about if this is a right decision for itself.
During merger. In this merger, TCL offered €315 million and Thomson offered €155 million, total amount was €470 million to form a new firm TTE. Based on the concept we talked about at the beginning of this paper, this deal could be definite as a merger, because a new firm formed. In this new company TTE, TCL has 67% share and Thomson has 33% share. Most of all, when we see the analysis of the data from TCL’s annual report, we could easily find out the financial risks that exist during this merger. And just like the risks that listed in the “pessimistic” report, TCL met much risk during this merger. Credit risk. A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection …show more content…
Then to increase the sale, TCL changed the sale policy make the receivable rapid increase which put itself in a high liquidity risk situation. Usually, to ease this situation, some companies starts to sell assets or hoarding cash. One hand, it may hurt the internal operation management, on the other hand, selling assets will make company suffer big lose. Assets that are difficult to sell in an illiquid market carry a liquidity risk since they cannot be easily converted to cash at a time of need. Liquidity risk may lower the value of certain assets or businesses due to the increased potential of capital loss. Based on that, high liquidity risk could cause TCL suffer huge
Thomson’s brand in Europe and its RCA brand in America are rather …show more content…
It didn’t know the market in France, didn’t know if its production will fit for the foreign market, didn’t know the business environment, even the appraisal report showed too much risk during the merger, however, just want to achieve the extending plan, TCL continued acquire companies all over the world, without thinking about if this is a right decision for itself.
During merger. In this merger, TCL offered €315 million and Thomson offered €155 million, total amount was €470 million to form a new firm TTE. Based on the concept we talked about at the beginning of this paper, this deal could be definite as a merger, because a new firm formed. In this new company TTE, TCL has 67% share and Thomson has 33% share. Most of all, when we see the analysis of the data from TCL’s annual report, we could easily find out the financial risks that exist during this merger. And just like the risks that listed in the “pessimistic” report, TCL met much risk during this merger. Credit risk. A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection …show more content…
Then to increase the sale, TCL changed the sale policy make the receivable rapid increase which put itself in a high liquidity risk situation. Usually, to ease this situation, some companies starts to sell assets or hoarding cash. One hand, it may hurt the internal operation management, on the other hand, selling assets will make company suffer big lose. Assets that are difficult to sell in an illiquid market carry a liquidity risk since they cannot be easily converted to cash at a time of need. Liquidity risk may lower the value of certain assets or businesses due to the increased potential of capital loss. Based on that, high liquidity risk could cause TCL suffer huge