Case Detail

Case Summary

Managing Foreign Exchange Risk: Acquiring Nusantara Communications Inc.

Case Number: 5-208-252, Year Published: 2008

HBS Number: KEL373

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Authors: Sergio Rebelo

Key Concepts

Telecommunications, Mergers and Acquisitions, M&A, Rural Telephone Systems, International Business Relations

Abstract

California telecommunications company Wireworld is considering an acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers. Nusantara had invested $50 million in developing the advanced rural telephone system, which had the potential to provide much-needed telecommunications services to the mostly rural Indonesian population. If if were exported, the worldwide market for this product in the next five years was projected to be in the billions. Should Wireworld acquire this small company halfway around the world? Was it prepared to enter the Indonesian marketplace and beyond?

Number of Pages: 5

Extended Case Information

Teaching Areas: Finance, Technology

Geographic: California, Indonesia, Global

Industry: Telecommunications

Organization Name: Wireworld, Nusantara Communications

Organization Size: Small

Decision Maker Position: Vice President

Decision Maker Gender: Male