Case Summary for Capital Mortgage Insurance Corporation

Topics: Insurance, McGraw-Hill, Real estate Pages: 2 (353 words) Published: September 19, 2011
Case Summary for Capital Mortgage Insurance Corporation
The president and senior vice president of Capital Mortgage Insurance Corporation (CMI) hope to acquire Corporate Transfer Services (CTS). Currently, CMI is a business that sells mortgage insurance to banks and other mortgage lenders. However, executives at CMI desire to expand their business into the real estate relocation industry. Essentially, this industry works to assist employees who have been transferred to a new city as they try to find a new home. The president and vice president of CMI met with the four owners of CTS on multiple occasions. If CMI acquires CTS, it will provide them with a quick way to get started in the relocation industry. This makes the acquisition appealing to the CMI executives, despite the fact that financially, CTS has been struggling to break even. Analysis

The reality is that CTS is not currently a flourishing company. They were only worth approximately $420,000 as of late 1978. CTS also owes millions of dollars in loans. If CMI acquires CTS, they will acquire these massive loans as well. However, the real estate relocation industry is rapidly growing, and the acquisition of CTS is a wonderful opportunity for CMI to expand beyond simply selling mortgage insurance. Strategies to Maximize

When conducting negotiations for the potential acquisition of CTS, it is important for the executives at CMI to not let their emotions show. The textbook says that when a person displays his or her emotions to the other party during a negotiation, this person increases the likelihood that he or she will be taken advantage of or manipulated. Even though CMI’s president feels strongly that this business acquisition will lead to future success for his company, he shouldn’t let his strong desires show to the owners of CTS (Lewicki, 2009). If CTS knows how much this business deal means to the CMI president, they may start to think that they can insist on asking for a...
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