Mergers and Acquisitions

Occurs when a firm acquires former suppliers or customers

• Horizontal Merger
• Vertical Merger
• Product Extension Merger
• Market Extension Merger

The acquisition of a former competitor

• Vertical Merger
• Horizontal Merger
• Market Extension Merger
• Conglomerate Merger

A firm gains access to complementary products through an acquisition.

• Friendly Acquisition
• Conglomerate Merger
• Market Extension Merger
• Product Extension Merger

A firm gains access to complementary markets through an acquisition

• Hostile Takeover
• Acquisition Premium
• Market Extension Merger
• Vertical Merger

There is no strategic relatedness between a bidding and a target firm

• Conglomerate Merger
• Tender offer
• Acquisition
• Horizontal Merger

Acquisitions can increase market value by

• 33%
• 25%
• 15%
• 28%

In agency problems, there are two ways that mergers and acquisitions benefit managers. Those are...

• Diversify Human Capital and Increase Size
• Increase Competitive Advantage and Competitive Parity
• Increase Profits and Economic Value
• None of the above

When one of the bidding firms knows some "extra value" in acquiring the target firm, and other competing firms are unaware of such value is known as...

• Imperfectly Competitive Market for Corporate Control
• Valuable, Rare, Private Economies of Scope
• Valuable, Rare, Costly to Imitate Economies of Scope
• Perfectly Competitive Market for Corporate Control

When implementing a diversification based merger, which structure do you use.

• M - Form
• U - Form

Which type of challenge is the hardest to overcome in a merger?

• Strategic
• Functional
• Cultural
• Operational