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Product cover image for Shandong Gold's Proposed Acquisition of TMAC in the High Arctic

Shandong Gold's Proposed Acquisition of TMAC in the High Arctic

Su Liu; Paul W. Beamish; Alex Beamish

Product #:9B21M059_P
Supplier:Ivey
Discipline:International Business, Strategy
Setting:Canada, China, Hong Kong, 2020
Details:Case (PDF) • 11 pages • 2021-05-31

Subjects:

FinancingCorporate financeRisk managementBusiness managementInternational businessStrategy

Industries:

Energy and natural resources sector

Geography:

North AmericaAsiaCanadaChina
Your Price:$9.71

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In May 2020, Chinese state-owned Shandong Gold Group was attempting to acquire the Canadian gold mining company TMAC Resources, whose gold mines were located in the High Arctic. If this acquisition took place, it would be the first time Shandong Gold Group would operate a gold mine outside of China. However, it would be a challenge for Shandong Gold Group to operate a mine in such a hard-to-navigate polar environment. As well, there were other lingering questions: How would the company handle the relationships with the indigenous Inuit people during the development stage of the project? Would Shandong Gold Group’s potential acquisition of TMAC Resources be successful, considering the Canadian government’s recent strengthening of its reviews of foreign acquisitions of Canadian companies? Would Shandong Gold Group’s state-owned identity increase the uncertainty of this potential transaction?

Learning Objectives

This case can be used in advanced undergraduate- and graduate-level courses on strategic management, international business, and risk management. The unique setting of the case allows students to discuss critical issues of a proposed international acquisition. In a strategic management course, the case introduces students to the topic of internationalization strategy. Instructors can focus on identifying opportunities, risks, and challenges when implementing an initial international acquisition. In an international business course, stakeholder analysis can be applied to understand the dynamic and variable forces in the international context and will provide students with a framework for assessing an international acquisition’s attractiveness and responding to conflicting environmental forces. These conflicts can include major cultural differences. In a risk management course, students need to identify and evaluate Shandong Gold’s key risk factors and possible risk solutions, based on information provided in the case on TMAC’s production and management. After working through the case and assignment questions, students will be able to
  • discuss Shandong Gold’s motives for attempting to acquire Canada’s TMAC;
  • assess the strengths and weaknesses of different financing modes for overseas mining rights;
  • analyze the key stakeholders in this deal and their possible considerations and standpoints; and
  • evaluate the level of risk types, and consider the potential countermeasures that Shandong Gold could take in response.
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Case Study: Shandong Gold's Proposed Acquisition of TMAC in the High Arctic | Ivey Publishing