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The paper will firstly deal with the impact of this merger on the shareholders of each of the companies. The paper will also provide a brief overview of how the financial condition of both the companies has improved post the merger. The paper will further deal with how the two companies together prove to be more profitable than each of them individually and how the companies prove to be more successful.
The merger of the two companies has proven to be very helpful and beneficial to the shareholders of both the companies. Issues that have been prevalent in the organizations individually are now being treated and improved. These improvements simply mean more sales and higher revenue which in turn simply means that the shareholders earn more. The businesses provide the shareholders with a high return and together the two companies are able to beat the tough competition that they faced from companies like Microsoft. Hence with the increased availability of resources and a combination of excellent products, the company will be able to generate higher revenues thereby providing the shareholders with better results and returns.
In a presentation by Sun, the company has listed out a few of the benefits for the companies individually as well as in a partnership. The report stated that for the Sun customers, ‘Oracle plans to protect, extend and enhance customers’ investments after closing’ (Sun). The company also expects that there will be higher investments and innovation in the research and development and also extended value for better and more rounded off products. Also the Sun customers will be able to use the global systems and services of Oracle. In the case of the oracle customers, ‘Reduces integration costs while improving performance, reliability and security of the system’ (Sun). The customers would also gain a complete and integrated line of standards based products as
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Since the past decade, the globalisation of the businesses across the globe has initiated a search for the competitive advantage, worldwide. With the increased competition to fetch the customer satisfaction in a cost effective way, the companies have responded to the pressure of attaining scale in a quickly consolidating global economy
A company can borrow from a bank or offer stocks and bonds in the open market. It can spend or invest the cash in current or future projects that will increase the worth of the firm and maximize the wealth of its owners. The process of deciding which projects to invest in and which not to is called Capital Budgeting (Brigham & Ehrhardt, 2010).
According to the paper mergers and acquisitions enhance market power of firms involved. This may be driven by adverse changes registered the economic environment such as a fall in demand relative to capacity, a rise in international competition within the domestic market, and/or legislative changes. Similarly, the firms may seek to maintain size relative to rivals customers and suppliers within the market.
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).
Mergers and acquisitions (M&A) are techniques that a business enterprise adopts at some stage of its life to increase the scale of its operations and thereby to reduce its total cost and increase its profits. There are, of course, other reasons too for M&A, such as, to increase the company's market share, to enter a new market, to develop a new product or to achieve management benefits, or to achieve all or most of them.
Most companies carry it out to improve their business fortunes.
The terms mergers & acquisitions are generally used together or sometimes even interchangeably but there is a sight difference in the two terms. Acquisition takes place when one company becomes the owner of another company in a way that the company sold ceases to exist and the buyer company continues to trade its stock.
In a merger, the surviving firm acquires the assets and liabilities of the other firm(s). A relevant example here is the recent merger of HDFC Bank and Times Bank. After the merger, Times Bank will go out of existence and expanded HDFC Bank will continue to exist.
The current P/E ratio of the shares is 6.6 and the market price per share is 1.03. Since P/E ratio = market price per share/earnings per share (www.12manage.com), if the P/E ratio is to be 8 without affecting the earnings from the share, the value of the
One of the important strategies firms use to expand externally is mergers and acquisitions. A sharp increase in mergers and acquisitions is seen in last two decades due to technological developments, financial liberalization policies, government
Capita plc has opted for acquisition and not merger because the benefits of an acquisition of a public company are more in the stock market. This helps in increasing the valuation of the concerned company in the long-run. Capital plc has acquired iSoft Business
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