Analyze and summarize this:

“Altice to Buy Cablevision

“Altice, the European telecommunications giant, agreed on Thursday to buy Cablevision for $17.7 billion.” (Tsang, 2015) “To help finance the takeover, Altice will sell additional shares in itself and draw on financing from three major banks.” (Tsang, 2015) According to our text pertaining to problems in achieving acquisition success, firms that are able to acquire the “right” firm, avoid paying too great a premium and effectively integrating the firms have a much greater success with an acquisition. (Hitt, Ireland, Hoskisson, & E., 2015, 2013)

“The cable and telecommunications industry is already in a state of upheaval as companies search for more scale and negotiating power with content providers. A takeover of Cablevision, one of the last trophies of the American cable industry, would draw significant concern from regulators, particularly as control of the telecom market shrinks to a few players.” (Tsang, 2015) Altice’s purchase of Cablevision is a prime example of chapter seven on mergers and acquisitions. As our text book states, mergers and acquisitions are a way to grow with the potential that may lead to strategic competitiveness. (Hitt, Ireland, Hoskisson, & E., 2015, 2013)

“Altice has already announced its intentions to build a footprint in the United States.” “Altice would join the top echelon of cable companies in the United States by adding Cablevision and its 3.1 million customers.” This acquisition is a prime example of overcoming entry barriers in our chapter. Telecommunications has high barriers to entry. According to chapter seven, a “key advantage of using an acquisition strategy to overcome entry barriers is that the acquiring firm gains immediate access to a market.” (Hitt, Ireland, Hoskisson, & E., 2015, 2013) This is exactly what Altice has done. This acquisition is an example of a cross-border acquisition because Altice is a European company acquiring Cablevision, which is a U.S. company. Altice should understand that cross-border acquisitions are not risk free and hopefully would have studied the risks and potential benefits. (Hitt, Ireland, Hoskisson, & E., 2015, 2013)

“Altice does not intend to create many cost savings by combining Cablevision and Suddenlink, the people briefed on the matter said. But that may change once it digests its acquisitions.” In relating to our chapter, it is common not to necessarily show much cost savings when acquiring another company, due to integration difficulties, being too large or an inability to achieve synergy, even though some managers tout cost savings as one of the reasons for acquiring another firm.