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Strategic Corporate Finance - Essay Example
Author : rowlandsporer
Finance & Accounting
Pages 3 (753 words)
Finance Module 5 SLP Assignment Name of the Writer Name of the Institution Net Present Value, Mergers, and Acquisitions Introduction A business entity that wanted to expand would have a number of limitations depending on its legal form and ownership structure…
That is why it is usually the most preferred form of business for expansion purposes. Mergers and acquisitions are the two usual ways in which ownership is extended in the corporate landscape. A business can either buy out the ownership rights of another company in exchange for cash or shares, or the two entities can merge their businesses to form a new company altogether. The first is called an acquisition and the second a merger. In this assignment, I will be considering the advantages and disadvantages of the Coca Cola Company merging with other firms within the industry. Choice of Company to Merge With, and its Benefits My original chosen company for the SLP is the Coca Cola Corporation, USA. The company is a brand leader in its segment of business, with Pepsico USA coming second in terms of revenues and profits as well as worldwide sales and distribution. Both these companies have been famous for their innovative marketing and sales strategies and indulged in price and branding wars that have benefitted consumers as well as the whole industry. However in terms of branding and sales both Pepsi and Coca Cola have more than 200 brands each. They jointly dominate the cola drink market so it is likely that the few other competitors in this segment would consider it a threat. ...