Case study on Najibnomics

Eddy said: Freakonomics? Hell no, it's something else.



KUALA LUMPUR - THE Harvard Business School in Boston will undertake a case study on Prime Minister Datuk Seri Najib Tun Razak?s courageous and bold initiatives to tackle the financial crisis.

The case study, to be used as a subject in the core curriculum of the macro-economic module, will be a capstone on how crisis is transmitted internationally.

It will also discuss how a country that has sound fundamentals and good regulations could withstand an international crisis.

The country is known for consolidating the banking, insurance and financial institutions following the 1998 currency crisis, said the Harvard Business School Alumni Club of Malaysia in a statement yesterday.

Besides highlighting Najib?s bold economic reforms, the Harvard study would also focus on the various economic liberalisation moves, measures taken to prepare the country for the Asean Free Trade Agreement and World Trade Organisation negotiations, said alumni president Tan Sri G. Gnanalingam.

'Harvard will also bring to attention how the country positions itself on free trade agreements with other countries and how its economic zones are poised for further foreign direct investment attractions.

'We in the alumni are proud to be associated with such a work as the study will become part of the syllabus programme and will be taught to thousands of international students.

'Moreover, students at Harvard will hear about what the Government and Bank Negara Malaysia have done since the 1998 crisis to regulate and stabilise the economy,' said Mr Gnanalingam.

The previous case study on Malaysia published in April 2002, 'Malaysia ? Capital and Control' written by Rawi Abdelai and Laura Alfaro, has been one of Harvard?s most successful case studies.

It analysed the political economy of capital controls in Malaysia during the 1997/98 Asian financial crisis.

It has been taught in every class for the last seven years not only to Harvard Business School students taking a masters degree in business administration but also to senior managers who attended executive programmes. -- THE STAR/ANN

Xerox to Acquire ACS in $6.4 Billion Deal

Eddy said: Hmmm.. what do you think, Sir?

By KEVIN KINGSBURY

Xerox Inc. agreed to buy business-services provider Affliiated Computer Services Inc. in a deal initially valued at $6.4 billion, as the copier company follows other technology giants in increasing its services revenue.

Xerox, based in Norwalk, Conn., has suffered from declining sales of copiers and printers, and the accompanying diminishing uses of ink, toner and paper. The deal for Dallas-based ACS is expected to triple Xerox's services revenue to an estimated $10 billion next year from 2008's $3.5 billion.

The move also represents the first bold move by Xerox Chief Executive Ursula Burns, who took over on July 1. Ms. Burns called the deal "a game-changer" for her company.

Xerox's agreement comes a week after Dell Inc. agreed to buy information-technology service provider Perot Systems Corp. for $3.9 billion. The sector's recent merger activity -- which includes Hewlett-Packard Co.'s purchase last year of Electronic Data Services -- leaves Accenture PLC, Computer Sciences Corp. and Unisys Corp. as some of the larger services companies still independent.

Based on the closing prices Friday, Xerox's deal values ACS shares at $63.11 each, a 34% premium to Friday's closing price and 55 cents below the stock's record high set in February 2006. Holders would get $18.60 and 4.935 shares of Xerox for each ACS share. Xerox also will assume $2 billion of ACS debt and issue $300 million of convertible preferred stock.


ACS's purchase price is similar to the $6.2 billion offer made two years ago by Cerberus Capital Management. Some investors objected early to the proposal, reasoning that the board could get a more lucrative offer. But such a bid never materialized, and Cerberus pulled its offer, citing turmoil in credit markets.

ACS eventually requested the resignations of five independent directors.

The combined Xerox-ACS company would have $22 billion of annual revenue, $17 billion of which would come in on a recurring basis. As much as $400 million in synergies are projected to be realized in the first three years after the deal's closing, slated for the first quarter.

ACS President and CEO Lynn Blodgett said, "We also know that for ACS to expand globally and differentiate our offerings through technology, we need a partner with tremendous brand strength and leading innovation. Xerox offers that and more to bring our business to the next level while strengthening theirs."

ACS has grown over its more than 20 years into a 74,000-person company with a broad product pipeline that includes consulting. That breadth has insulated ACS from a broad downturn in information-technology spending, allowing the company to snap up smaller companies and hire new employees. It serves the commercial and government sectors through long-term contracts.

About a quarter of ACS's revenue comes from the health-care sector, which includes commercial and government contracts. At an investor day earlier this month, ACS was confident that it could increase its Medicaid contracts as well as benefit from a push for more electronic health records, according to a J.P. Morgan research note.

Xerox makes printers for offices and large-scale production, but garners most of its sales from its services businesses, which include maintenance contracts, printing supplies and lease revenues. The recession has exacerbated weak demand for printers, and results have been muted by a strong dollar as much of the 54,000-employee company's revenue comes from overseas.

Nonetheless, Xerox is perceived to be in solid shape – and certainly much stronger than the near-bankrupt condition that Anne Mulcahy assumed in July 2001 when she became CEO.