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Finance & Accounting
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Mergers and Acquisitions-B Table of Contents Introduction 3 1. Strategy – How Does The Target Company Appear To Fit into the Acquirer’s Long-Term Strategy? 4 2. Regulatory – Were There Any Regulatory Implications? 5 3. Valuation – How Have the Company Valuations Been Justified?…

Introduction

Are any Sell-Offs Likely? 10 7. Risk – Given that the Majority of Takeovers Destroy Shareholder Value, What Are the Major Risks? 11 Conclusion 13 References 14 Introduction Evidences reveal that M&As can be quite risky to lead the pathway of the acquiring company’s destruction and on the other hand, be highly beneficial to assist the company in the attainment of its long-term objectives. Despite the immense risk, companies opt for M&As in order to gain the benefits of operational leap, integration, larger customer base, channels and higher competencies (Galpin & Herdon, 2007). One of the most risky acquisitions in the recent past can be identified as the acquisition of National Westminster Bank (NatWest) by the Royal Bank of Scotland (RBS) in the year 2000. It is recorded as one of the most daring acquisitions, due to the fact that during the period of acquiring NatWest, RBS was recognised to be smaller than the target company. It took a great effort from RBS’s end to complete the deal and rewarded it the reputation of one of the leaders in the British Banking Industry (Larsen, 2007). ...
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