Economics Coursework: Article 2

Slide 1

• What is the main topic of the article?
• Which firms are discussed? (summarise in your own words)?
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• It is about a Swedish mobile operator firm “Tele2” willing to acquire “Com Hem” (a cable TV and broadband group) in a bid of $3.3bn. The merging of the telecoms and media firms is in the best interests of investment group “Kinnevik” (check economic concept). Tele2 is willing to acquire Com Hem by paying Com Hem shareholders in cash (paying a 12% premium on a closing share price of SKr130.60K and in shares of their own.
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• What is the relevant background to the article? For example:
• - what aspects of the firm (e.g. its size or history) or the industry have to be understood to understand the article?
• – should the change to the business environment or the operation of the firm discussed in the article be seen as part of a larger process? How long has this been going on?
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• - Tele2 has always been Sweden’s leading mobile operator, founded in 1993 (source required). There is great competition in the telecoms and media broadcasting industry; needs research. Com Hem is a cable TV and broadband group, founded in 1983 (source required)
• - This is just the latest event in which a telecoms firm has placed a bid to takeover a TV cable and broadband, especially after a similar bid involving AT&T which placed a bid $85bn for Time Warner (which is being blocked by the U.S. government). It is recently been common to see telecom firms eyeing the cable TV/broadcasting industry/market – for example, different telecoms firms, including BT, have been seen attempting to buy media content by placing big bets.

Slide 2

• Are any specific terms or concepts used in the article?
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• - Competition
• - Ownership/Shareholders
• - Synergies
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• What (other) economic concepts will be used to analyse this story?
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• - Collaboration
• - Competition/Rivalry
• - Consumer demands/wants being met