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…
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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
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(Acquisitions and Mergers Essay Example | Topics and Well Written Essays - 3000 Words)
“Acquisitions and Mergers Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/miscellaneous/1567318-acquisitions-and-mergers.
It has been seen that the value created is high for the target firms present in advanced institutional and economic environments. The advanced economies refer to the countries that possess resources of high quality. Aulakh et al (2000) have shown the modus operandi of the domestic firms that take part in the international resources acquisition.
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
It was absolutely surprising and unbelievable to the Europeans that an Indian entrepreneur was able to acquire one of the most prestigious steel firms in Europe. Globalization and liberalization has brought many opportunities and challenges to the business world.
Introduction In the last 5 decades there are more stances of cross border mergers and acquisitions than the number of lockouts and cases of bankruptcy. Although the number of cross border merger and acquisitions has increased manifold but the instances the number of cross border mergers and acquisitions has increased substantially.
Man has always tried to conquer the unconquerable and do the undo able this is the same factor that drives the companies into the abyss of the unknown (Allan and Michael, 2010). In a bid to outdo and outsmart the competitors and get the upper hand of strategic advantages, companies cannibalise other companies or in some cases form understanding relationship.
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
lly starts through a series of informal discussions among the board members of the companies, following with formal negotiations, letter regarding the objectives, goal towards the company, acquisition or merger agreement and finally, executing the deal and transferring the