Combination of Two Companies Having Business in Same Industry

Question: Discuss About Combination of Two Companies Having Business in Same Industry? Answer: Introducation: This report is prepared on the basis of business combination of two companies having business in same industry. These two companies named Novotel and Sofitel want to enter into strategic alliance in order to increase their profit. In this case, both companies need to comply with competition law, free trade law, and cartel prohibition laws. With the increasing ramification of Australian economic changes, there are several laws and regulations which are applicable for the companies going in business combination. However, in Australia, if companies are making cartel by entering into joint ventures or strategic alliance with each other then in this case this sort of combination would not be acceptable. In this report, two companies Novotel and Sofitel are entering into business combination with a view to increase their overall profit. Nonetheless, this profit could be increased only when these two marketing department provides synergy. In addition to this, when these two companies having business in same industry need to avoid these following strategies such as price fixing, market sharing, limitation of products and bid rigging. These all are the criminal offence under the enterprises act and it could also result into severe penalties for both the business and individual directors of both companies. Novotel and Sofitel both are making strategic alliance by combining their marketing department to create marketing arm against other rivals (Rahim and Brady, 2015). Therefore, both companies need to avoid acts which fall under the cartel act such as price fixing, market sharing, limitation of products and bid rigging. This report will reflects several points and factors on the business combination and how companies could create synergy by making strategic alliance. This strategy has been proposed by company to create marketing arm and create shield against all the competitive strategies of rivals in market. Therefore, both the companies need to comply with the business combination law before entering into strategic alliance with each other. It is evaluated that Novotel and Sofitel both are independent organizations and want to make combination of their marketing department with a view to increase the overall profit. Therefore, both organization need to enter into strategic alliance contract. These types of combination could be referred as merger or amalgamation of two businesses. In addition to this, both the companies have to comply with laws and notifications issued by Australian Competition and Consumer Commission. It is observed that making strategic alliance with other organizations requires various documentations, complying with competition laws and regulation and complete level of disclosure to all the stakeholders of organizations. In addition to this, both companies also need to make disclosure to general public by publishing its information in two newspaper one in vernacular language and other one in English language (Mitchell, et al, 2016). References Mitchell, R., O'Donnell, A., Marshall, S. and Ramsay, I., 2016.Law, corporate governance and partnerships at work: a study of Australian regulatory style and business practice. Routledge. Rahim, M.M. and Brady, I.M., 2015. The Collective Bargaining Authorisation Provision for SMEs in the Australian Competition Law-Serving or Distorting a Public Benefit