Acquisitions and Mergers - Essay Example

Comments (0) Cite this document
Summary
Mergers and Acquisitions are happening everywhere; when a successful M&A occurs it is usually coupled with nine of ten unsuccessful ones but they do not reach the eye of the media as these negotiations are covered up when they are not successful. There are different motives…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.2% of users find it useful
Acquisitions and Mergers
Read TextPreview

Extract of sample "Acquisitions and Mergers"

Download file to see previous pages However, if a merger is not successful, it can cause problem for the resulting organization. Nevertheless, the strategy to merge or acquire can be guided by the corporate philosophy that an organization may follow.
Mergers and acquisitions are often taken to be as same terminologies however there is a difference between them. The differences, types, advantages and disadvantages of mergers and acquisitions will be discussed in detail in this assignment.
Mergers and acquisition often abbreviated as M&A refers to the strategies and finance related to the corporate level and management which deals with the purchase, selling and joining of different companies for the purpose of assisting or helping a company grow in its respective industry without establishing a new business. Mergers or acquisitions may be private or public depending on whether the merging company is in the list of the public companies or not. These types of dealings can be either friendly or hostile.
In the situation where one company takes over another company and declares itself as the new company, the purchase is termed to be as acquisition. Legally, the company that has been purchased can no longer operate in the market and the buyer is free to trade its stocks and shares. In merger, the two companies combine and continue to work as one business rather than existing as separate businesses. This usually takes place between companies which are of the same status, their previous stocks are dissolved and new stocks are maintained. This is usually termed as ‘merger of equals’. For instance in 1999 a merger took place between two pharmaceutical companies; GlaxoWellcome and SmithKline Beecham, both the firms combined together to and a new company, GlaxoSmithKline emerged. (Sherman, 2006)
Vertical Merger: This type of merger takes place between a company and a supplier or to say it in other words, company ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Acquisitions and Mergers Essay Example | Topics and Well Written Essays - 3000 words”, n.d.)
Retrieved de https://studentshare.org/miscellaneous/1567318-acquisitions-and-mergers
(Acquisitions and Mergers Essay Example | Topics and Well Written Essays - 3000 Words)
https://studentshare.org/miscellaneous/1567318-acquisitions-and-mergers.
“Acquisitions and Mergers Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/miscellaneous/1567318-acquisitions-and-mergers.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Acquisitions and Mergers

Mergers & Acquisitions

...?Mergers & Acquisitions Table of Contents Mergers & Acquisitions Table of Contents 2 Introduction 3 Types of Mergers and Acquisition 3 Mergers and Acquisitions in United Kingdom 5 Issues in Cross Border Mergers and Acquisitions: In the light of theory and evidence 6 Human Resources & Cultural Issues 7 Valuation Issues in Mergers and Acquisitions 8 Accounting Issues in Mergers and Acquisitions 11 Conclusion 12 Reference 14 Bibliography 18 Introduction “Mergers and...
10 Pages(2500 words)Essay

Mergers and acquisitions

...?How does government regulation affect the success or failure of mergers and acquisitions? There are many factors that determine the success or failure of mergers and acquisitions hence, it is important for everyone involved in this process to have a clear understanding of how it works. Thus, this essay seeks to critically analyse the extent to which government regulation can influence the success or failure of mergers and acquisitions. It starts by explaining the meaning of the key terms then followed by a brief outline of the factors that influence this process. Case examples about the impacts of government regulation of...
10 Pages(2500 words)Coursework

Mergers and Acquisitions

..., the organization would be able to increase its earnings per share through a merger with American Airlines. This could help stabilize the company and would make it the second largest in the industry. It seems that international growth, fleet expansion, and/or merging with legacy member is key to the companies ability to survive the consolidating industry in a contracting economy. Hence the key to success for US Airways and American Airlines will be found in their ability to generate enough revenue to either expand their fleet or to attempt strategic acquisitions of smaller firms operating in strong local markets. IX. Summary Over the last decade the industry has experienced a great deal of volatility due...
10 Pages(2500 words)Essay

Mergers & Acquisitions

...Mergers & Acquisitions Introduction In the business world, separate companies get togetherto formlarger ones by way of mergers & acquisitions. Hundreds of millions, or even billions, of dollars deals are made as a result of different companies joining together and thus also create headlines in the business world. 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...
8 Pages(2000 words)Essay

Mergers and acquisitions process

...Chapter 10: Mergers and Acquisitions Mergers and acquisitions (M&A) involve a bidding (buying) firm buying a target firm and are a way for companies to grow through a strategy of corporate diversification and vertical integration. Empirical evidence shows that an M&A strategy is more successful if both firms are strategically related than unrelated. The acquisition of related targets creates economic value, but the value is captured by the owners of target firms while the owners of bidding firms break even or, as studies showed, at the least M&A does not decrease the shareholder value of bidding firms. Despite these findings, companies continue to...
4 Pages(1000 words)Essay

Mergers & Acquisitions

...Mergers & Acquisitions - An Introduction The term 'merger' is often abused, by being loosely applied to refer to any form of business combinations. It has however got a specific connotation. A merger actually refers to a business combination of two or more firms in which only one firm survives and the other firm or firms go out of existence. 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. A...
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) =...
4 Pages(1000 words)Essay

Mergers & Acquisitions

...MERGER & ACQUISITION Table of Contents Introduction 3 Saudi Aramco 6 Petromin 9 Strategic Rationale 9 Rivalry among the established competitors 12 Risk of new entrants of potential customers 12 Suppliers’ bargaining power 13 Threats of substitute products 13 Buyers bargaining power 13 Source of Financing 15 Hostile Acquisition of Samarec 17 Impact of Acquisition and Integration Issues 18 Conclusion 19 References 20 Bibliography 23 Introduction A merger means a combination of two similar sized organisations to form a new entity. An acquisition is performed when a larger company purchases another company (comparatively smaller) and that...
15 Pages(3750 words)Essay

Mergers and Acquisitions: Hostile Mergers

...Table of Contents Introduction 2 Case study- ArcelorMittal 2 Mittal Steel Company and Arcelor 2 1.Strategy 3 Why the changes implemented 3 2.Regulatory 5 3.Valuation 6 4.Financing 7 5.Defence tactics 7 6. Implementation 9 7. Risk 10 Conclusion 10 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...
11 Pages(2500 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...
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 Essay on topic Acquisitions and Mergers for FREE!

Contact Us