I am developing a Thesis in M&A, my theme is BMW Group Acquires Tesla Motors!
What do you think about this?
Could you suggest were BMW would be gaining as well as Tesla?
Where could I be acheiving the highest synergies?
The only thing I'd be willing to suggest is for you to use the first sentence of your post as the title of your thread.
I am not sure what school you attend, but a hypothetical case study is not a thesis-worthy research methodology. A thesis should not be a work of fiction and I would not let any of my students write something like that.
Also, if you title your thesis provocatively, like you titled this thread, it would be perceived as a cheap trick and at worst lacking academic integrity,
Never, ever will Tesla be acquired by BMW or any other car manufacturer. If ever a possibility of being bought, it would be by Google.
Better thesis might be on the effectiveness of Tesla using an Apple/Google (tech/software) approach to M&A in terms of market share growth within the luxury car market as opposed to how BMW (or any other lux auto company does it.)
Or another thesis might be on where Tesla could take advantage of non traditional M&A to accelerate growth within the lux auto market compared to BMW, Audi, Lexus, etc...
Wouldn't Mercedes or Toyota be more likely to buy Tesla?
sheesh, you guys are harsh
BMW Group Acquires Tesla Motors
So are you stating a fact or what? Next time restate your title as "Can BMW Group Acquire Tesla Motors?" Your above title made it sound like BMW Group acquired Tesla today.
In his fantasy thesis, it did. That's his D-destiny.
Failed assumption - VW doesn't get it, BMW doesn't get it ( I3 is a fancy Leaf with Volt option ). The only German automaker that gets it is MB ( sits on the Tesla board ). If you want to play with your fantasy assume MB aquires Tesla...
Elon has publicly affirmed that Tesla is not for sale until the Gen III car is in mass production. At that point TSLA is very likely going to be too big to purchase.
I read in the 2012 Q3 report I believe that there are poison pills in place to make a takeover extremely unlikely.
Also, I think a lot of Tesla's value is intangible, basically the team's values, goals, and ambition, all of which is very fragile if you bring in a new boss, especially one with an ICE mindset. At best an acquired Tesla Motors would evaporate and become only its shadow, as the soul of the company would be lost. Other than this drive and attitude, there are the hard assets, but what would any major automaker do with an extra factory in their stagnant ICE market?
I personally hope that Tesla never sells out, because I fear the revolution would die if it does. A big part of why people believe in Tesla, also, might be the fact that Elon's salary is $33,280 instead of $17,000,000 and that he has personally invested hugely, which gives him credibility when he says he believes in the future of the EV and that he wants to do what's right for the average customer. He's either authentic to the core or an incredibly talented actor, but he has all the qualities of an exceptional leader, yet he cannot be controlled by BMW or anyone, which is another reason why no reasonable person would consider taking over Tesla Motors any more than they might consider purchasing a cloud.
i think tesla could roll out a number of models easily that kills BMW/VW/Toyota/... in a couple of years. Developing costs are 10% from what the big companies have. The number of parts is dramatically low. Supply chain managment costs 20% under the peers.
its to late for a M&A process. Better make the best First-follower, learn from Tesla and follow the track.
BMW and Porsche driver
PorfirioR - Do you know a thesis can be an hypothetical case, no? My school é 18th in the FT ranking I think its fine.
I think it could makes sense for BMW to acquire Tesla as its electric vehicle techonology would work as a complement to the E-motion project, so they would have the best electric cars (Tesla)
but also they could develop their own cars based on Tesla.
I think with this BMW could steel market share to Mercedes-Benz which is not investing so much in electric vehicle techonology.
Tesla is fine with Elon Musk, but I mean, it is a small car manufacturer competing in a well-established market,k I believe it would get to a certain point that it would have to enter some kind of joint-venture! And if that happens, which brand do you think that suits Tesla? I would say only 2/3 Lexus, wich is not so good in european markets, BMW or Mercedes no?
Thank you mreichenberger I believe that Tesla's different way of doing things would also create value in BMW Group!!!
Tesla is part of a complex vision of Elon Musk. I don't think he would sell it to anybody. This guy is not out there to make money. He wants to change the world. Selling Tesla to the highest bidder would mean abandoning his dream.
Tesla need to finished their job, if the company is buy for a big player will be the end of EV's again. The changes in technology is only because Tesla has proven that an EV is better car over ICE. Once it happens I hope Mercedes is the one, no Toyota pries company style.
To me, there are separate questions:
1. should BMW acquire Tesla?
2. can BMW acquire Tesla?
3. can Tesla decide if to be acquired or not?
4. if so, does it want to be acquired?
1. No, unless BMW believes that
a. technically, it cannot deliver in par or better product internally for the same cost IF it wants to (not likely)
b. business wise, it's worth spending the money to cannibalize Tesla as a competitor to both its electric and ICE lines, and it's worth having the rest of the competition benefiting from it as well for free (not likely)
c. for the intangible, the brand equity is worth it (not likely, BMW is one of the most valuable auto brand)
d. financially, it can get a bargain (not with current market cap)
2. Probably yes
3. yes, unless it's going to be a hostile takeover. Cannot imagine why BMW would want to do that. Not sure if there can be legal argument against such act
4. Not in a while
Will it happen? Very unlikely
Would I give a student high mark in proposing this in his/her thesis? No
Iverdasca - Do you realize that MB and Toyota already own a part of Tesla and that Tesla actually sells them drivetrains for their B-class electric and new Rav4 electric respectively?
Besides that, MB has first right of refusal to match any offer to buy Tesla. Do you really think they'll let BMW get their hands on it first?
Elon would never allow that to happen. He's smart enough to know... and the i3 practically shouts it; BMW would like nothing more than to kill Tesla and set the EV revolution back 10 years. Even companies like Nissan that appear to take EVs seriously still don't want them cutting into ICE sales.
Sorry Iverdasca, did not mean to disrespect your school. My PhD is in a technical discipline, so I am not familiar with what the business schools allow for research these days.
Perhaps this is splitting hairs, but a better approach might be to research the impact of new EV entrants on the automobile industry. After all, it is assumed to be a disruptive technology. You could include case studies of failed EV entrants as motivation for your study and then introduce as a thesis that new entrants such as Tesla can adopt (or reject) merger/acquisition as a strategic goal, similar to the strategy of many technology start-ups.
If TM's stock goes much higher, it may be able to counter with a reverse take-over, and acquire BMW!
Considering that Tesla is supplanting BMW in BMWs markets currently, I could a actually see that happening inside of a decade Brian.
@lverdasca, let's hope you won't become a CEO or anybody in a responsible position during your lifetime. Just to think that BMW could acquire Tesla is bad judgement. I think in order for that to happen, Elon must suffer brain damage or have an onset of early Alzheimer:)