Mergers and Acquisitions (8:30-10)

A strategy which 1 firm buys a controlling interest in another firm with the intent of making the acquired firm a subsidiary.

• Merger

• Merger

• Hostile Takeover

• Acquisition

   

A special type of acquisition strategy wherein the target firm does not solicit the acquiring firm’s bid.

• Hostile Takeover

• Acquisition

• Merger

• Takeover

Reason why firms uses acquisition strategy.

• Decreased speed to market

• Decreased diversification

• Managers overly focused on acquisition

• Reshaping competitive scope

Management of the acquired firm _________.

• takeover the firm

• acquire power

• reports to management of acquiring firm

Which is more common, mergers, acquisitions, or takeovers?

• Takeovers

• Mergers

• Acquisition

Increase firm's power by exploiting cost-based and revenue-based synergies.

• Vertical Acquisition

• Related Acquisition

• Horizontal Acquisition

Factors associated with a market or with the firms currently operating in it that increase the expense and difficulty new firms encounter when trying to enter that particular market.

• Cross-Border Acquisition

• Diversification

• Barriers to Entry

These are the problems in achieving acquisition success except:

• Integration difficulties.

• Evaluation of performance

• Inability to achieve synergy.

• Managers overly focused on acquisitions.

It is a process through which a potential acquirer evaluates a target firm for acquisition

• Synergy

• Junk bonds

• Due diligence

• Bureaucratic controls

It is formalized supervisory and behavioral rules and policies designed to ensure consistency of decisions and actions across a firm’s units.

• Synergy

• Junk bonds

• Due diligence

• Bureaucratic controls