This paper seeks to examine examples of companies in the USA that were involved in a merger. Mergers often look forward to ensuring profits rather than losses in the business combination. The selected company that involved itself in a merger is the Continental Airlines Company. The company was involved in the merger with another airline company. The two companies were the entities in the merger. An entity in business or in mergers and acquisitions (M & A) describes the organization, company or corporation that is acquired by another organization, company or corporation or that merges with the other in order to ensure a successful business in terms of profits, quality of products and competition and its continuous and long term survival in the world's competitive markets (Harwood, 2005). In the year 2010, an airline company in the U.S, Continental Airlines, merged or was rather acquired by another company, United Airlines (UAL) Corporation, also an airline holding company in the U.S which had its headquarters in Chicago in the state of Illinois. The two airline companies merged to form the United Continental Holdings in October 2010. The merger took place to ensure that the new company founded posed stiff competition to other airline companies around the world. The merge was also to ensure better services than the services provided before by the individual airline companies. After merging, the founded airline, United Continental Holdings became the largest airline company in the world as was confirmed by revenue passenger miles (New York Times, 2010). Mergers and acquisitions are often accompanied by transaction prices and payment terms. At the time of the merger between Continental Airlines and UAL Corporation, there were several factors that were involved in determining the transaction price and the payment terms for each of the individual companies after the merger. The first factor that determined the payment terms was the presence of other potential bidders who would provide better payment terms. United Airlines initially held merger talks with the US Airways. It is said that a deal was close between the two companies (New York Times, 2010). Unfortunately the merger talks broke off paving way for talks between the United Airlines Corporation and other airlines. On the other hand, the Continental Airlines also held merger talks with the Star Alliance and even merged. However the two airlines later on separated. This paved way for merger talks between the Continental Airlines and the United Airlines Corporation. Better payment terms were put in place bearing in mind that there were other potential bidders in case of a break off of the merger talks. The second factor that determined the transaction price and the payment terms between the two companies was the share deal that was signed by both entities. When the United Airlines and the Continental Airlines announced their merger in 2010, they struck so many deals. One was of a new name of the company to be formed which was named the United Continental Holdings. Secondly, the two companies struck deals to share the losses and profits. This share deal was the key factor which was strongly involved in determining the transaction price and payment terms during their merger. The third factor that determined the transaction price and the payment terms was the taxes to be imposed on the newly formed company by the US government. Taxes imposed on a certain company greatly influences the payment terms. In case of friendlier taxation, the two entities could enjoy sharing in large amounts of the profits incurred. However, in case of harsh taxation by the US governm
Mergers and acquisitions occur in business companies all over the world. In mergers, two different companies come together to form a single company known as a parent company. In acquisitions, one big company acquires a smaller company so that the two companies transact business under a single owned company. …
ferences 14 Cultural Integration in Cross-border Mergers and Integration: Issues and Solutions The importance of M&A cross-border cultural integration A merger or acquisition is often candidly described as a marriage of two organizations; in business, this would be between two enterprises.
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.
6 4. Financing – How Is The Acquisition To Be Financed? 7 5. Defence Tactics – Were the Tactics Employed Sensible Ones? Were the Managers of the Target Company Genuinely Resisting or Simply Seeking to Squeeze Out a Higher Offer? 8 6. Implementation – Will the Acquired Company be Difficult to Integrate?
A number of researchers discussed about the synergies that 'M & As' accord to the combined entities and how organisations factor in the benefits of synergies into their strategies to achieve not only growth but increased competitiveness, market share, profitability and shareholder value.
The significance of this study is twofold. First, the advantages of the merger and acquisition activity in China will be identified, as there has been a growing trend in the prevalence of mergers and acquisitions all over the world, especially in developing economies like China (Finkelstein 1999).
He has provided vital assistance along all the way. His help is really immeasurable.
Department of Finance, XYZ University, is another resource to gaining this study. It has provided valuable modulation, books, Journals, Researches and too many efforts for this study.
Therefore it will be very important to understand how this trend impacts on the Chinese economy, as the country is effectively competing with other countries for FDI. Secondly, this study is significant as it points out the causes of the failures of the merger and acquisition activity in China.
he governments on the other hand, do not like too much buyout and mergers because this trend leads towards making the economy more monopolistic in nature and therefore, few players will have an undue competitive advantage on others. The framework used to prosecute the companies
HRM is the custodian of talents. It is often being noticed that for the sake of productivity and business efficiency two similar kinds of companies are merged. They become one single entity after the merger. But there are certain cultural differences
In a merger, two companies negotiate on terms of operation and share capital thus they end up dissolving the existing companies and form a new company. An acquisition is the process by which a large or powerful
3 pages (750 words)Coursework
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