Month: March 2009

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The Future of the Merck and Schering-Plough Merger

I. Introduction

On March 9, 2009 Merck Co., Inc. ("Merck") and Schering-Plough Corporation ("Schering-Plough") announced that a merger agreement had been unanimously approved by each corporation's Board of Directors [1] and is worth $41.1 billion dollars. [2] Furthermore, the merger of these two pharmaceutical giants is expected to increase efficiencies and result in cost savings of approximately $3.5 billion annually. [3] This merger agreement is constructed as a reverse merger, under which Merck and Schering-Plough will merge, under the name Merck. [4] The purpose of the unusual manner of the merger is to ensure that Schering-Plough's joint venture agreement involving Remicade with Johnson & Johnson is not terminated. [5] This article discusses the uniqueness of the reverse merger. Part II analyzes the structure of the reverse merger and the purpose of the merger. Part III evaluates the advantages and disadvantages of the merger of these two pharmaceutical companies. Part IV … Read the rest

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Honking and Swearing Never Work: An Examination of Urban Traffic Congestion Remedies

I.  Introduction

As any city grows and develops a strong central business district (CBD), congestion is going to become a matter of concern for those who both live and work in that area.  While this pain has been universally felt amongst metropolitan areas, the handling of this problem has varied.  Despite the recognition of the issue, as the United States Department of Transportation (USDOT) has noted that congestion has nearly tripled in the last twenty five years, that same time period has seen an 239 percent increase in highway spending.  [1] A recent English study estimated that a five percent reduction in travel time could generate five billion U.S. dollars in savings per year. [2]  While no similar research has been commenced in the United States, American urban citizens lost 3.7 billion hours of time and wasted 2.3 billion gallons of fuel sitting in congested streets in 2003. [3]   The … Read the rest

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The Lending Tree: How to Snag a Small Business Loan from a Bank

I. Introduction

Unless a new business owner is a millionaire or has an angel investor, a small business loan is almost always a necessity to get the business off the ground. The amount of labor that goes into starting a small business is a feat in and of itself.  However, without the financial backing of a small business loan issued from a bank, all other efforts at starting the business may be fruitless. This article will discuss how to obtain a small business loan from a bank by discussing the preparation that goes into receiving a small business loan from a bank and discussing how to manage debt.

II. Loan Meeting

Before receiving a small business loan from a bank, the new business hopeful will have to present his or her case to a lending officer from the bank. [1] While the presentation to the lender may be a … Read the rest

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The Big Three: Bailout or Bankruptcy?

I. Introduction

The auto industry’s troubles have recently come to light in mainstream American news. The big three automakers, comprised of GM, Chrysler and Ford, have seen slumping sales and are in need of major financial help to avoid going under. In 2008, GM’s sales were down 21% in North America. [1] Ford reported a loss of $14.6 billion dollars in the same year. [2] Chrysler’s sales were down 30% in 2008, which was the largest reported loss of the major auto makers last year. [3] Both GM and Chrysler have requested help in the form of federal loans from the US government, while Ford has made an effort to stay afloat without federal help. [4]

II. Government Intervention

The auto industry is a private industry and is thus driven by market forces. Generally, the government allows these market forces to determine which companies will thrive and which will fail. … Read the rest

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The U.S. Financial Crisis: Is Legislative Action the Right Approach?

[A few short years ago, there was a country experiencing significant prosperity.  The flow of credit within the economy was fluid, stock prices were at all time highs, and many people were becoming wealthy in due part to real estate speculation and appreciation.  As the economic outlook in the real estate market was bright, banks began granting increasingly risky loans.  Eventually the bubble burst.  Inflated real estate market values began to decline, lendees found themselves unable to pay back their risky loans, and the credit markets froze.  As a result, government intervention came in the form of subsidizing failing banks and businesses.]

 In the middle of this financial crisis facing our country, one would assume this passage is referring to the United State of America.  However, this is the very similar story of the Japanese housing bubble that burst and led to what is … Read the rest

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Investing in China through a Hong Kong, SAR entity – Tax considerations for riding the next wave

I. Introduction.

It is well known that the big movement of capital in the next decade is going to be to Eastern Asia, the People's Republic of China (PRC) and India being the two world's most preferred targets due to the size of their consumer martkets. This article will only focus on the PRC, and Hong Kong due to its proximity to the Chinese Mainland. As it will be further explained, although foreign capitals may be invested in the PRC directly; the Hong Kong tax system is lower and simpler than the Chinese one, and therefore, frow a taxation view point it makes sense to manage assets located in the PRC through a Hong Kong, SAR entity. Hong Kong became a Special Administrative Region (SAR) of the PRC on July 1, 1997. However, it has a high degree of autonomy, except in the areas of defense and foreign policy, and retains its own currency, laws, and border controls.

II. Investing in the Chinese … Read the rest