Merger of HSBC and Oman international bank - Essay Example

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Based on liquidity ratio, market price per share, profitability ratio, and earnings per share it is seen that the banks were doing fine until the merger year. However, since a slow growth and unsatisfying profits were registered, it is recommended that the company values its…
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Merger of HSBC and Oman international bank
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Download file to see previous pages Using secondary research and quantitative analysis, this research aimed at testing how the hypothesis that mergers incurring high leverage levels succeed under normal markets. The study results show that mergers incurring high leverage levels also incur higher financial risks.
Contemporary business models face various challenges among them competitiveness of rivals and economic landscape. The unpredictability of the economic environment has pushed companies to take various measures among them mergers and acquisitions. Since this research is focused on mergers, it considers mergers as the collaboration of two mature business entities.
Mergers have different meanings to different entities. To the most important stakeholders, the parent companies, use mergers are partnering to explore a common business interest. On the other hand, mergers mean the teamwork between businesses with a common business goal. The difference between business goals and business interests is that the former indicates the plan of a business and how it plans on meeting various financial and operational goals. On the other hand, business interests involve common ambitions as well as shared vision of taking opportunities head on. However, business interest take on the assumption that the market has a gap that the merging companies have to collaborate to ensure success is achieved in the most financially and economically effective manner possible.
Five types of merges are identified within the business environment. Among these includes the horizontal, product extension, market extension, vertical, and conglomeration. Horizontal mergers involve two companies which are in direct competition with each other. The motive of this type of merger is to cut down on competition and maximize on factors that can improve the economic footing of both companies. Vertical mergers include a customer and company. ...Download file to see next pagesRead More
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