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Corporate finance: Expand Ltd Case - Assignment Example
Author : altamckenzie
Finance & Accounting
Pages 13 (3263 words)
This report will explain how the two companies involved in this acquisition were valued and the factors that were considered in the decision process. This report is useful for any company that seeks to expand and grow its business through mergers and acquisitions…
The paper tells that firms seek to expand and grow their business after being in operation for some time. This is done for a number of reasons such as increasing profits, satisfying the unique needs of the customers, attracting and retaining more customers and remaining highly competitive. Expansion and growth of businesses can be done through various means. Mergers and acquisitions are ways through which this can be achieved. Mergers and acquisitions simply refer to the aspect of corporate finance, management and corporate strategy that deals with the combining, dividing, selling and buying of similar entities and different companies that can assist in the rapid growth of an enterprise in its location of origin, new location, new field or its original sector by using a joint venture without creating a subsidiary. Many corporate finance specialists such as DePamphilis and Harwood note that in various respects, the distinction between an acquisition and a merger has become more and more blurred. This is especially true when it comes to the ultimate economic outcomes of both mergers and acquisitions. However, they also point out that the distinction between the two terms is not completely lost in every situation. An acquisition is defined as the purchase of a company or business by another business entity or company. Surveys show that achieving successful acquisition has been a very difficult venture. In fact, various studies conducted on major acquisitions show that 50% of those acquisitions have been unsuccessful. ...