Mergers and Acquisitions

Which of the following is not the reason for acquisition?

• Increase market power

• Overcoming entry barriers

• Increase diversification

• Building up brand image

An acquisition can reduce the negative effect of an intense rivalry on a firm's financial performance

• True

• False

An acquiring firm can gain capabilities that the firm does not currently possess such as in term of technology capabilities, expertise and reduced inertia.

• True

• False

Which of the following is a problem to achieve successful acquisition?

• Small organization

• Very little diversification

• Acceptable debts

• Lack of due diligence

The main purpose of acquisition is to create synergy.

• True

• False

When mergers and acquisition occurred, restructuring process will also take place.

• True

• False

One of the restructuring process after mergers and acquisition is called downscoping. What is downscoping

• Reduction of employees

• Sell firms' assets to others

• Eliminating unrelated businesses

• Adding more new products

When two firms agree to integrate their operations called ________

• Merger

• Acquisition

Firm buys a controlling or 100% interest in another firm called _______

• Merger

• Acquisition

Internal development of new product often considered high risk and become the solid reason for mergers and acquisition.

• True

• False