A Case Studies On Merger And Acquisition Between Pacific Century Cyberworks Limited And Cable & Wireless HKT Limited

This paper consists of two parts: case description and case analysis.The case mainly describes the whole event of merger and acquisition between Pacific Century Cyberworks Limited and Cable & Wireless HKT Limited. The background and financial status of all parties including Singapore Telecoms, Pacific Century Cyberworks Limited and Cable & Wireless are introduced firstly. Then the process, content of scheme and financial arrangements of the merger and acquisition are described in details.The case analysis is based on the theory of financial management. By using SWOT to analyze the strength, weakness, opportunities and threat, the strategy of acquisition of Cable & Wireless by Pacific Century Cyberworks is discussed firstly. Then the motives, risks and movement of share price before and after the merger are analyzed in details. Lastly, the post-merger performance is tested by analyzing the business development, financial status and share price to see whether the major goal of merger - maximization of shareholders fund and other goals are achieved or not. Thus, a conclusion can be drawn on whether the merger between a new economy enterprise and a traditional economy enterprise is suitable or not.