business strategy-vertical horizontal or conglomerate , Financial Accounting

What was the business strategy underlying the merger? How was the acquisition financed? Was it a vertical, horizontal or conglomerate merger?

 The strategy behind those mergers was to manage through economic cycles and volatile fuel prices, invest in fleet, improve services for the customers and achieve strategic objectives as the Delta airlines was strong in the south and the east and to Europe whereas Northwest was strong in the Midwest and across the pacific. They could have a more attractive product for their customers by putting both together. This merger was considered to give them benefits like more effective air craft utilization, a more comprehensive and diversified route system, diminished overhead and improved operational efficiency. 

The merger was valued at $ 3.4 billion.  This amount was derived from

i)  By issuing 339 million shares of Delta common stock at a price of $9.60/share.

ii) Capitalized Merger-related transaction costs.

 The purchase price also included the fair value of Delta stock options and other equity awards issued on the closing date in exchange for similar Northwest's securities. Northwest stock options & other equity awards vested on the closing date and were assumed by Delta and were modified to provide for the purchase of Delta common stock. The number of shares and, if applicable, the price of 1 share were maintained for the 1.25 exchange ratio. Earned stock options held by employees of northwest were considered part of purchase price.

         737_purchase prize list.png

Vertical, Horizontal or Conglomerate merger:

It was a vertical merger as both of the companies were engaged in same business of air carriage.

Posted Date: 3/12/2013 2:54:03 AM | Location : United States







Related Discussions:- business strategy-vertical horizontal or conglomerate , Assignment Help, Ask Question on business strategy-vertical horizontal or conglomerate , Get Answer, Expert's Help, business strategy-vertical horizontal or conglomerate Discussions

Write discussion on business strategy-vertical horizontal or conglomerate
Your posts are moderated
Related Questions
The Wanless Corporation provides Internet consulting services to a wide-range of customers. The company's fiscal year ends on December 31. For the year ended December 31, 2011, the

The Operating Cycle Two Wheeler Cycle Shop buys all of its bikes from one manufacturer, Baxter Bikes. On average, bikes are on hand for 45 days before Two Wheeler sells them. The c

SAMPLES PITCH FOR AN ACCOUNTING ASSIGNMENTS

1. Finco is a wholly owned Finnish manufacturing subsidiary of Winco, a domestic corporation that manufactures and markets residential window products throughout the world. Winco h

Question 01: (1.1 and 1.3) What is accounting and how is accounting environment? Question 02: (1.2 and 1.4) Presenting the characteristics of the quality of accounting information

Ask questiJohn’s away at the moment, and his email provider has a size limit on the data that can be sent via email. What is a potential solution for John, and name a provider that

Select two of the following firms: Dole Foods, Campbell Soup, Hershey and Dr. Pepper Snapple. Use the 10-K, annual report and other information to answer the following questions.

Calculation of Efficiency ratios  -                     2008 2009 2010 M Net Sales

Fully secret trusts This is where neither the existence nor the terms of the trust are disclosed in the will. The trust will be enforced only if the following conditions are

The chairman's declaration claims that RZP Co has delivered growth in every year in dividends earnings and ordinary share price apart from 2002. Analysis demonstrates that the chai