Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Reasons for mergers and acquisitions
The key reasons for mergers and acquisitions, is to maximise shareholder wealth otherwise it wouldn’t be worthwhile.
Economies of scale
Larger capacity results in reduced costs. With vertical integration it's easier to achieve this as duplication is avoided. For conglomerates, combining of some of the departments will achieve this (centralised head office, HR department, Marketing etc.)
Increased market share
Thus increasing profitability and becoming a leader in the market, which improves earnings quality.
Improved efficiency
Poor management and inefficient operations would be improved.
Reducing the competition
Profitability can be increased if competition was removed. However the implications from the competition commission need to be considered.
Tax relief
Group companies and taxation relief. A company which is not being able to obtain tax relief as it isn't generating profits can merge or acquire a company which generates profits.
Liquidity
Target company may be cash rich and this will improve group's statement of financial position (balance sheet).
Asset stripping
Acquiring other entity and then selling off their assets.
Diversification
This helps reduce risk by attaining businesses in other industries.
RISK RETURN RELATIONSHIP A business operates in a market environment, which is not within its control. It is exposed to several dangers from the internal with external sources
Question: Consider the following information: Stock A Stock B Beta 0.8 1.4 Share price, $
How do mergers affect communities? A: While a locally controlled bank is merged into a bank headquartered somewhere else (an out-of-market merger), a few apprehension about the i
Significance of cost of capital
Hi I have been working in this for 2 weeks now and I just can''t seem to figure it out. ok lets say Bill is 40 yrs old. His made 72,000 last year had 60,000. in annual expenses,
What factors does Standard & Poor’s analyze in determining the credit rating it assigns a sovereign government? Answer: In rating a sovereign government, Standard & Poor’s anal
Suppose you have recently been contracted as a financial consultant to a London-based engineering company, Alpha Products Plc. The company uses three components as part of their pr
Simple Arbitrage The easiest arbitrage opportunities in the option market exist when options violate simple pricing bounds. No option, for example, should sell for less than it
Discuss the applicability of an operating in vegetable growing business in Uganda.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd