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…
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 ...
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Since the past decade, the globalisation of the businesses across the globe has initiated a search for the competitive advantage, worldwide. With the increased competition to fetch the customer satisfaction in a cost effective way, the companies have responded to the pressure of attaining scale in a quickly consolidating global economy
This paper focuses on the motivating factors toward mergers and the problems caused by these mergers.
In this section we discuss why firms merge, some of the reasons why firms merge include the effort to gain market power, tax advantages of gaining a loss making firm, efficiency, increasing market share and diversification among other factors.
Most companies carry it out to improve their business fortunes.
The terms mergers & acquisitions are generally used together or sometimes even interchangeably but there is a sight difference in the two terms. Acquisition takes place when one company becomes the owner of another company in a way that the company sold ceases to exist and the buyer company continues to trade its stock.
Conglomerate mergers take place when the firms involved in the merger operate in different product markets. These mergers may be product extension mergers - merger involving firms that produce different but related products - or pure conglomerate mergers - mergers between firms operating in entirely different markets.
In a merger, the surviving firm acquires the assets and liabilities of the other firm(s). A relevant example here is the recent merger of HDFC Bank and Times Bank. After the merger, Times Bank will go out of existence and expanded HDFC Bank will continue to exist.
The current P/E ratio of the shares is 6.6 and the market price per share is 1.03. Since P/E ratio = market price per share/earnings per share (www.12manage.com), if the P/E ratio is to be 8 without affecting the earnings from the share, the value of the
independent business corporation into a single enterprise which is accomplished by one firm purchasing the assets of the other or by purchasing its equity stocks is called a merger (Britannica). The history of mergers dates back to the 1960’s when these arrangements occurred
lly starts through a series of informal discussions among the board members of the companies, following with formal negotiations, letter regarding the objectives, goal towards the company, acquisition or merger agreement and finally, executing the deal and transferring the
In this report I have written on who benefits between the industry and the consumer in case of a merger. Report finds that both benefit.
American aviation industry has been qualified us the most profitable
Companies may also merge in order to overcome forces of competition by increasing economies of scale. Many companies have merged due to diverse reasons depending on their situations and market scenarios. This paper will discuss the merger that took place between the US airways
4 Pages(1000 words)Essay
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