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Mergers - Essay Example

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As companies look for the best methods of attaining growth, one of the strategies proposed of attaining shareholders’ value has been involving Mergers and Acquisition procedures. Studies show that since 2004, these procedures have increased significantly by over 50 percent…
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Mergers

rgers are part of reforming a business which involve two companies coming together to create a big organization that pleases shareholders (Albizzatti and Sias 35-28).
One factor that may make two companies succeed in merging is by integrating their data thus it will be easier to achieve the shareholders value. According to Gaughan (2009), this strategy is mostly used in tough economic times where those companies which cannot survive the competition in the market are bought-off by the strong companies in the market. Stanwick (16-11) descries that this enables the companies to improve their competitive nature as other companies merge hoping to increase their share in the market and thus will produce more than they would have if they were to operate by themselves.
This study shows the possibilities that would make a company such as SLP want to merge with another one. It will also show how the mergers are financed and finally it shows the second and the third company to be chosen as a merger giving reasons for each. In my opinion if I was to pick a company to merge with between Dell and Intel it would be Dell. This is because it has more benefits to the company than Intel. Perry and Herd (19-12) shows that Dell is a multinational company and it already has a big market share all over the world which has been estimated to be 20 percent.
This advantage would make SLP Company be in a position of venturing the global market as Dell would increase its industrial visibility. Dell is a company that deals with computers and SLP Company is involved in vehicles. Their merging type would be in the form of extending their product as the businesses are different but the products are somehow related. If Dell was to takeover SLP it would achieve more benefits of economies of scale as the size would increase as well as its product line. To pay for the deal the best way would be through fixed value stock. This is where the shares are fixed in that the buyer’s shareholders may run ... Read More
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