Managing Foreign Exchange Risk: Acquiring Nusantara Communications Inc.

Case Solution

Sergio Rebelo
Kellogg School of Management ()

California telecommunications company Wireworld is considering the acquisition of Nusantara Communications, a subsidiary of Indonesian conglomerate Bakrie & Brothers. Nusantara had invested $ 50 million in the development of the advanced rural telephone system, which had the potential to provide much-needed telecommunications services to the predominantly rural population of Indonesia. If exported, the world market for this product would amount to billions over the next five years. Should Wireworld take over this small company on the other side of the world? Were you ready to enter the Indonesian market and beyond?

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