Jet Airways takes over Air Sahara

Jet Airways takes over Air Sahara
India’s largest private airline, Jet Airways, says it has agreed to buy its smaller rival, Air Sahara, for
$140 million. The takeover gives the airline a
combined market share of 32%. Jet Airways
acquires the aircraft, equipment and landing and
takeoff rights at the airports Air Sahara had. “The
deal is definitely going to be good news for Jet
Airways shareholders”, Jet Airways founder and
chairwoman, Indira Goyal said. Some analysts are
predicting substantial synergy (cost reductions and
other benefits) from this takeover. Better deals from
aircraft manufacturers are expected. Streamlining the two head offices into one unit should
reduce fixed costs. The interlinking of the different air routes should allow more passengers to
be offered connecting flights with the new enlarged airline

1. Explain the type of integration used in both of these case studies.
2. If Jet airways were now to merge with an aircraft manufacturer:
i. Explain how this merger would be classified
ii. Analyse two potential benefits to Jet Airways of this merger
3. Examine the likely impact of the Jet Airways takeover of Air Sahara on any two stakeholder
groups.
4. Using the Mercedes Benz/Chrysler case study and any other researched examples, e.g.
AOL and Time Warner, discuss why mergers and takeovers fail to give shareholders the
benefits originally predicted.