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
Partners F and G receive an interest allowance of $10,000 and $15,000, respectively, and divide the remaining profits and losses in a 3:1 ratio. If the company sustained a net loss

Thatcher Corporation's bonds will mature in 12 years. The bonds have a face value of $1,000 and an 11.5% coupon rate, paid semi-yearly. The price of the bonds is $1,050. The bonds

Weighing up the costs and benefits You may feel that, when considering a piece of accounting information, provided four main qualities identified are present and it's material

the salaries paid in 2004 is rs. 500000 salaries outstanding is rs.20000 salaries paid in advance for 2004 is rs 30000 what is the actual salary expenditure for 2004?

Q. What is basic defination of FCA? Yes. FCA is a method of accounting for all financial costs of funds used or committed for municipal solid waste (MSW) services. FCA suggests

i need help with my project

Vantage Company issued bonds with a $500,000 face value and a 6% stated rate of interest on January 1, 2013. The bonds carried a 5-year term and sold for 95. Vantage uses the strai

Q. Describe about Trade Test? With a view of perform the work in a trade an artisan staff should have the skill required for the trade and for this Railway workers classificati

A changeable instrument is deemed part liability and part equity. IAS 32 necessitate that each part is measured individually on initial recognition. The liability element is

Dangers of over-reliance on trade credit In effect for the reason that trade credit represents temporary borrowing from suppliers until invoices are paid it becomes an importan