Answers are provided in Appendix A at the back of the text.
1. Explain why more acquisitions have taken place in Europe in recent years.
2. What are some of the barriers to international acquisitions?
3. Why might a U.S.–based MNC prefer to establish a foreign subsidiary rather than acquire an existing firm in a foreign country?
4. Provo, Inc. (based in Utah), has been considering the divestiture of a Swedish subsidiary that produces ski equipment and sells it locally. A Swedish firm has already offered to acquire this Swedish subsidiary. Assume that the U.S. parent has just revised its projections of the Swedish krona’s value downward. Will the proposed divestiture now seem more or less feasible than it did before? Explain.