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Mergers And Acquisitions Basics: The Key Steps Of Acquisitions, Divestitures, And Investments - Essay Example

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International Mergers and acquisitions Mergers, takeovers and strategic alliance - Underlying perception The persistent behavior of business always entangles in the notion of a dynamic target. The process in which the markets and businesses are operating is in constant evolution, transformation and development…
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Mergers And Acquisitions Basics: The Key Steps Of Acquisitions, Divestitures, And Investments
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Download file to see previous pages The strategic transactions are different from the commercial transactions as in they are defined as dramatic events for the companies and often represent either the end to a company as an independent business or at least a dramatic change in its management, ownership and fate. Mergers acquisitions also fall in the category of the strategic transaction (Frankel). The concept of the mergers and acquisitions are modern business concepts however they throw utmost challenge and difficulties in the process of business organization and operations. It is imperative to say that every individuals involved should be possess a clear understanding of the maneuvering progression. In today’s complex competitive business milieu mergers are sometimes regarded as the policy of long term business survival. Mergers & takeovers The process of buying, selling and combining companies are referred to as Mergers and acquisitions commonly referred to as M &A. The notion with which the acquiring and the target companies feel that they can reap potential benefits by financing, mutual cooperation in the inter as well as intra industry environment without the utilization of mammoth cost and new infrastructure development. It may be the case that sometimes companies acquire another company against their will basically recognized as hostile takeovers. In the takeover scenario, the takeover company will be generally purchasing the majority of the outstanding shares of a target company. After merging the firms may adapt the name of the acquiring company, the target company or just develop a new name. In the United States the mergers and acquisitions substantially require several approvals to be met such as the Federal Trade Commission and the Department of Justice. The regulatory body acts as the protection mechanism which ensures that the mergers are not able to gain monopoly power which will stand in the process of exploitation. The development procedure of the mergers and the acquisitions are so complex and difficult to initiate that they are often kept as secrets in some cases even from the knowledge of their employees. When the mergers and the acquisitions are successful they are generally announced in the public domain and it is generally a boon for the shareholders and it acts a prior signal for the reduction in costs with increasing revenues. Again joining with the competitor a company will posses higher market power and a simultaneous rise in the market share will generate (Gersdorff & Bacon, 2). The companies generally enter into merger acquisition for the purpose of enhancing long- term competitive advantages in the support of strategic goals. The strategic notion may also be of the fundamentally defensive in nature as when there is a predominance of large number of mergers in a particular area then the non merged companies may be forced in order to merge with other non merged companies in order to maintain the competitive position. A speculative notion arises when the acquirer views the taken over company as a commodity. Another form of speculative rationale arises when the acquirer purchases an organization with the intention of bifurcating the acquired organization into pieces at a price higher than the cost of acquisition. Sometimes the mergers or the acquisitions may be forced on a company because of the management failures. Market conditions vary during the implementation timescale ...Download file to see next pagesRead More
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