Book Opener

The Opening SceneJakob and Aaron Kowalski and Cecilia Bronislawa aremeeting in the boardroom of JAC Industries, Inc., discussinga possible merger with Collins Industries, Inc.The Big MergerAARON: Thanks for your cooperation, Cecilia andJakob. I’m glad that we could meet on such shortnotice. We have some really important mattersto discuss.CECILIA: No problem. Of course I would make timefor this meeting. We’re facing the biggest decisionof our corporate lives, and we don’t have a cluewhat to do. I’m hoping this meeting will help usdecide on the right course of action.JAKOB: We’ll figure something out. We always do.Plus, we can’t feel too bad about ourselves. We’relearning as we go along, and I don’t think we’redoing a bad job.CECILIA: Thanks for the pep talk. I guess we betterstart discussing the matter at hand. What do youthink we should do, Aaron?AARON: What we need is a valuable asset to improveour bargaining position.CECILIA: Look, we took the chance when you wantedto go public and sell stock, and it turned out great!Now we have to be prepared to take anotherchance. You can’t expect to get anywhere in businessif you’re not prepared to take a few risks!JAKOB: That’s what you said about last month’sshareholder proposal.CECILIA: Well, was I wrong? I seem to remember thatwe survived that, didn’t we?AARON: Barely.CECILIA: Yes, but we survived. Remember, let’s focuson the positive!AARON: Let’s figure out one very important point first.What exactly does Collins want to buy?CECILIA: What do you mean?AARON: Do they want the assets of the company, itsstock, or the entire company?JAKOB: Wait a minute! Did either of you consider theidea that Collins may just be trying to eliminatecompetition? Sometimes companies buy outsmaller companies in their industry just to get ridof competition.CECILIA: I suppose it’s possible, but that doesn’tmatter to us. Let’s focus on how much money wecould make.JAKOB: Let’s consider the legality of this wholesituation. Do you think this merger would violateantitrust law? It’s better to be safe than sorry.Maybe we should call the SEC.AARON: I think you mean the FTC.JAKOB: Whatever.CECILIA: One thing’s for sure—we need to considerall options carefully.JAKOB: We’re not completely vulnerable. Won’t thebusiness judgment rule protect us?CECILIA: Maybe, but we still have to be fair toeveryone involved.JAKOB: Well, whatever happens, our lives willcertainly be changed forever.CECILIA: And hopefully we’ll get rich!1. What is the source of the federal government’spower to regulate business?2. What two statutes regulate the sale of securities?3. What statutes regulate antitrust activities?4. What are the differences among a merger, anasset acquisition, and a stock acquisition?Chapter 30: Corporate Regulation and Expansion 645