StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Recently Uploaded

Mergers and Acquisitions on the Market - Coursework Example

Comments (0)
Summary
The paper "Mergers and Acquisitions on the Market" discusses that there will be “marriages” and takeovers of big organizations and hostile takeovers in the business world. But there is nothing to be afraid if M&As are carefully planned and handled by responsible and expert teams…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98% of users find it useful

Extract of sample "Mergers and Acquisitions on the Market"

Download file to see previous pages “More than 8 in 10 deals fail to enhance shareholder value because of poor planning or execution or both, yet, by contrast, most of the executives interviewed (82%) believed their deals were successful.” (KPMG Press Release)
One of the causes of merging is a competition or the thought of managements that they could dominate the market if they get other companies to join them. But there are grave consequences to their action if things are not well planned. And planning a merger and acquisition involves many things to include cultural, employees’ feelings and attitude, not to mention the technical and financial sides of the bargain.
“It seems that almost daily one hears of corporations – some willingly, some not – involved in such transformations as part of a strategy designed to achieve corporate growth, economies of scale, vertical integration, diversification, and even provision of capital for future leveraged buyouts.” (Buono and Bowditch 3)
There is this danger in merger mania but corporations seem to ignore. KPMG International conducted a study in 1999 on 700 of the most expensive deals from 1996 to 1998. “Summary of findings: 83% failed to boost shareholder wealth. 53% reduced shareholder wealth.” (Grubb and Lamb 155)
Once merging and acquisition are in the offing, two and more managements are in double time. They have to prepare and commit themselves to activities and events they do not really know. In fact, they are unprepared for the eventualities. And instead of doing the regular business of the day, they become more preoccupied with the new activities of an entirely new company. And there will be more and more jobs to be done. Management and employees become preoccupied with new things instead of their usual job.
Grubb and Lamb studied some of the worst takeovers in American businesses, and they said, “Merger failure is not a recent phenomenon nor is it a single isolated measurement at one moment in time. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Mergers and Acquisitions on the Market

The main dangers of using mergers or acquisitions as a form of market entry

...? The Main Dangers of using Mergers or Acquisitions as a Form of Market Entry al affiliation: The Main Dangers of Using Mergers/Acquisitions as a Form of Market Entry Mergers or acquisitions may be defined as an aspect of corporate finance or strategy and management that involves buying, selling and combination of various companies. The objective of combining is to finance or assist a company that is growing to grow fast without forming another business entity. The two terms have a slight difference, on one hand, acquisition may refer to a company taking over another and establishing itself as a new owner. On the other hand, merger occurs when two companies agree to operate as one new company. As suggested by Turner and Johnson (2010...
5 Pages(1250 words)Essay

Mergers & Acquisitions

... of companies in the light of current issues. For better understanding, the analysis would be done in the light of relevant theories and applications with the mention of specific examples in the arena of merger and acquisitions. Types of Mergers and Acquisition Through ‘merger’, two companies would join together to create a new company. Acquisition refers to one company taking over the assets of another company. Merger and acquisition can be of three types: Horizontal, Vertical and Conglomerate. In horizontal mergers and acquisitions, two firms, involved, deal across similar products and services. This type of mergers and acquisitions is frequently used as the mean for an organisation to enhance the market share through getting into merger...
10 Pages(2500 words)Essay

How Mergers And Acquisitions Affect Shareholders' Wealth in Short Term: the European Market

...?Table of Contents 0 Introduction 4 1. Overview of the research study 4 2. Rationale of the research study 6 3. Significance of the research study 6 1.4. Problem Statement 7 1.5. Objectives of Research Study 7 1.6. Hypothesis 7 1.7. Research Methodology: 8 1.0.Literature Review: 9 2.1. Introduction: 9 2.1. Merger: 9 2.2. Acquisition: 9 2.3. Motives behind Mergers and Acquisition: 10 2.4. Mergers and acquisitions according to economies of scale theory: 11 2.5. Mergers and acquisitions according to economies of scope theory: 12 2.6. Strategic Mergers versus financial Mergers: 12 2.7. Market reaction towards merger or acquisition announcement: 13 2.8. Determinants of share price: 13 2.9. Motives behind takeovers: 14 2.10. Intricacies...
60 Pages(15000 words)Dissertation

Mergers and Acquisitions: Hostile Mergers

...? Mergers and Acquisitions: Hostile Mergers (Case study ArcelorMittal) Table of Contents Introduction 3 Case study- ArcelorMittal 3 Mittal Steel Company and Arcelor 3 1.Strategy 4 Why the changes implemented 4 2.Regulatory 6 3.Valuation 7 4.Financing 7 5.Defence tactics 8 6. Implementation 9 7. Risk 10 Conclusion 11 References 11 Introduction Merger can be defined as a consolidation of two same size companies, which creates a new company. An acquisition is, when a company buy another company and a new company will form (Sherman and Hart, 2006, p.1). There are different types of merger and acquisition can find in the business world, among which the takeover of Arcelor by Mittal steel Company is considered as hostile merger. Hostile merger...
11 Pages(2750 words)Assignment

Mergers & Acquisitions

A merger takes place when the firms involved in the combination are of unequal size. The larger or stronger firm continues to exist because of its stronger bargaining power and the smaller or weaker firms go out of existence.
Four periods of economic history have witnessed very high levels of merger activity, which are called a merger waves. These periods are characterized by cyclical activity i.e. large number of mergers followed by relatively fewer mergers ((ICMR), 2003). The current period is called as the fifth wave. In the first three waves, merger activity was concentrated in the United States of America. The fourth and the fifth waves were global in nature though the impact of the wave is most pronounced in the U...
8 Pages(2000 words)Essay

Mergers & Acquisitions

...Mergers and Acquisitions (a) In the proposed merger between Smith plc and Amanda plc, two options for issue of shares may be explored. The first is avaluation of the shares on the basis of current market price: Total number of shares in issue = 1,864,000 Total share earnings = {165,000 + 239,000} = 404,000 Individual share earnings = 0.216 or 21.6 p On this basis, if a price to earnings ratio of 8 is to be maintained, then each individual share price must be set at: (x/0.216 X 8) = 1.73 pounds For Amanda plc shares, this would result in a lowering of the market price per share by (2.40-1.73) = 0.67 pence, while for Smith plc shareholders, the value of their stock rises by (1.73-1.03) = 70 pence. The second option proposes a valuing...
4 Pages(1000 words)Essay

Mergers & Acquisitions

.... Such valuation determines the amount that is to be paid to the share holders of the acquired company by the acquiring company. Though there are quite a few method of valuation, the firms basically choose the one that befits them. The modern market predominantly finds ‘Stock Market Driven Acquisitions’ (Vishny, 2002). Also, there are many other methods of valuation of a company in case of mergers and acquisitions and such methods include Net Present Value Method, Adjusted Present Value Method, Venture Capital Method, First Chicago Method among many others (Bapat, 2004). Hostile Acquisition of Samarec As the kingdom of Saudi Arabia went into recession, in order to overcome the ill effects Saudi Aramco was nationalized. In January 1989...
15 Pages(3750 words)Essay

The INTERIM REPORT ABOUT THE DISSERTATION TOPIC: Industrial Organization and Market Structure: competition, mergers and acquisitions, oligopoly, industry studies (e.g. aviation, bank), theory of the firm

... is compared with that of the foreign banks and a study is done to analyze the trend followed by both during the recessionary period and the recovery period thereafter. d): - Study the market dynamics in the Global banking sector and the impact of Mergers and Acquisitions on the overall market structure. e): - Study the capability of the Global banking industry in sustaining its performance during recession: This study gains more importance in the wake of the present European crisis. Is Global Banking Industry Ready to Face The Heat of Another Recession A special focus is given on the measures taken by the central bank to combat pressures of recession. International Monetary Fund (IMF) states that a global recession would take a slowdown...
3 Pages(750 words)Research Paper

Mergers and Acquisitions: Hostile Mergers

From this discussion it is clear that in the year1978, the steel company was formed as “Ispat International” by the father of Lakshmi Mittal. Different disagreements between the father and son made a separation in the year of 1995.  It’s headquartered in Rotterdam, Netherlands.  The company grow high within few years by different investment and acquisition throughout the world. Among which, the most controversial merger was with Arcelor. Before the acquisition , Arcelor  was the largest steel producer in terms of  turnover and second largest in terms of steel output, whereas Mittal Stand first in terms of output. The CEO of Arcelor is Guy Dolle, and it’s headquarter is situated in L...
11 Pages(2750 words)Essay

Mergers& Acquisitions

...US Airways and American Airlines Merger al Affiliation: Us Airways and American Airways Merger Introduction Merging refersto the situation whereby two established company’s linkup and form a new company. The merging companies share the securities depending on the terms agreed on during the contract. The main reasons for merging are profit maximization, diversification, and expansion. Companies may also merge in order to overcome forces of competition by increasing economies of scale. Many companies have merged due to diverse reasons depending on their situations and market scenarios. This paper will discuss the merger that took place between the US airways and the American airways which led to the formation of the world’s largest airline...
4 Pages(1000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Coursework on topic Mergers and Acquisitions on the Market for FREE!

Contact Us