AN ANALYSIS OF THE PROPOSED HSBC ACQUISITION OF CCF
In early-April 2000, HSBC Holdings PLC agreed to acquire a majority holding in Credit Commercial de France (CCF). The agreement is conditional on HSBC acquiring a minimum of 50.1 per cent of the CCF voting shares and on regulatory approvals from the European Union (EU), France, and the United Kingdom (UK). Serious opposition to the planned merger between the two banking firms is not anticipated (Kamm, Carreyrou, & Bahree, 2000; "S&P Affirms HSBC Holdings Plc," 2000). Financial arrangements for the acquisition are expected to be completed by June 2000 (Portanger, 2000), with regulatory approval expected by year-end 2000 ("HSBC 'a Major Player in Europe,'" 2000). Major CCF shareholders that have already announced their intentions to tender their shares to HSBC will, if they follow through on these intentions, assure HSBC a minimum 58.8 per cent of CCF shares (Kamm, Carreyrou, & Bahree, 2000).
The proposed merger of the two banking firms is analyzed. The analysis focuses on (1) strategic choices made by HSBC in developing its acquisition strategy, (2) motivations by both firms for the merger, (3) a SWOT (strengths, weaknesses, opportunities, threats) analysis of the proposed merger, (4) analysis of the proposed merger within the context of Porter's Five-Forces Model of Competitiveness, and (5) challenges that will be faced by HSBC in relation to differences in corporate cultures should the merger be completed.
An important strategic choice made by HSBC in relation to the acquisition of CCF was that HSBC want to become a major player in the banking market in continental Europe. The company considers itself to be underrepresented in continental Europe ("HSBC 'a Major Player in Europe,'" 2000). HSBC also wants to dilute its risk exposure in the Asian market. By increasing its presence in the market in continental Europe, this strategic objective can be attained, thereby imp...