roving HSBC's competitive position.
A second important strategic choice made by HSBC was to seek a quick entry into the banking market in continental Europe. This strategic choice was opposed to the alternative of building a new banking network in continental Europe (Portanger, 2000). The acquisition of CCF will provide HSBC with the quick entry it seeks.
A third important strategic choice was to acquire a firm with a record of performance that is comparable with that of HSBC. CCF posted a return on equity (ROE) of 18 per cent in 1999, compared with 17.5 per cent at HSBC (Portanger, 2000).
A forth important strategic choice made at HSBC is the decision to enhance the bank's presence in both private banking and asset management. CCF is strong in each of these business areas (Portanger, 2000).
A major motivation for HSBC to acquire CCF was to dilute the company's risk exposure in the Asian market (considered by HSBC management to be highly volatile) by increasing the company's presence in the European banking industry ("S&P Affirms HSBC Holdings Plc," 2000).
CCF, a successful but medium-sized company, has been a takeover target for larger financial institutions in Europe for more than a year. The suitors and their proposals, however, were not attractive to CCF management. Realizing that acquisition was probable sooner rather than later, CCF management was amenable to an acquisition proposal that addressed their own needs and those of CCF shareholders. The HSBC offer, which came as a surprise, met each of these requirements and has been recommended to CCF shareholders by the CCF board ("HSBC 'a Major Player in Europe,'" 2000). Job losses at CCF, as an example, are expected to be minimal in an HSBC-CCF merger.
The SWOT analysis of the merger focuses on the post-merger company. Current strengths and weaknesses of both companies, however, also are considered.
Standard & Poor's affirmed its strong ratings on HSBC ...