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Case Study On NOL Essay

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Introduction In November 1997, the acquisition of APL by NOL was successful. As compared to the larger US based APL; NOL was a small Singapore firm. Through this acquisition, it appeared that NOL was ready to become an industry leader in the shipping industry. Thus this acquisition is a strategy through which NOL buys a controlling, 100 per cent, interest in APL with the intent of making the acquired firm a subsidiary business within its portfolio. Thus APL became a wholly owned subsidiary of Singapore based NOL, a global transportation and logistics company engaged in shipping and related businesses. Below is the study of the problems and strategies that NOL faced or is facing during the acquisition and integration of APL. …show more content…

2) Corporate Culture As separate management structures were maintained for NOL/APL, the corporate culture of both firms differs greatly from each other. APL had a strong American culture that encouraged flexibility, innovation and change whereas NOL was a typical Singapore firm, organized, disciplined and highly conservative. 3) Economic Crisis in July 1997 The Asian Financial Crisis was a period of financial crisis that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown (financial contagion). It is also commonly referred to as the IMF crisis. For NOL, the decision to acquire APL caused a major problem. Its debt level increased significantly due to the cost of acquiring APL and for taking on APL’s debt. In October 1998, NOL placed assets worth S$544 million for sale. Major items included its landmark HQ building, four vessels, property in several countries, stakes in several companies and 60,000 containers. Internal measures also included a wage freeze and voluntary pay cuts of between 5-10% for senior executives. The annual dinner was also scrapped. These were all measures taken to reduce corporate debt. Organizational Controls Strategic control By adopting all of APL’s systems for the combined entity’s IT framework, NOL would build and maintain a truly global

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