a. what type of merger was proposed? why do you think this type was selected? course hero

What is the a merger model?

A merger model is the analysis of the combination of two companies that come together through the M&A processMergers Acquisitions M&A ProcessThis guide takes you through all the steps in the M&A process. Learn how mergers and acquisitions and deals are completed.

What are the types of mergers and acquisitions?

Types of Mergers and Acquisitions 1 Mergers. In a merger, the boards of directors for two companies approve the combination and seek shareholders' approval. 2 Acquisitions. ... 3 Consolidations. ... 4 Tender Offers. ... 5 Acquisition of Assets. ... 6 Management Acquisitions. ...

What is the essence of a merger?

The Essence of Merger. The terms "mergers" and "acquisitions" are often used interchangeably, although in actuality, they hold slightly different meanings. When one company takes over another entity, and establishes itself as the new owner, the purchase is called an acquisition.

What happens to competition after a merger?

The resulting company is faced with the same competition in each of its two markets after the merger as the individual firms were before the merger. One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company. A merger occurring between companies in the same industry.

What is horizontal merger?

Horizontal Mergers. Horizontal Merger A horizontal merger occurs when companies operating in the same or similar industry combine together. The purpose of a horizontal merger is to more. is a merger between companies that directly compete with each other. Horizontal mergers are done to increase market power.

What is a conglomerate merger?

Conglomerate Merger A Conglomerate Merger is a union between companies that operate in different industries and are involved in distinct, unrelated business activities. Conglomerate mergers are divided into pure conglomerate mergers and mixed conglomerate mergers. is a merger between companies that are totally unrelated.

What is a merger contract?

It is a mutually binding contract. in which two companies join together to form one company. In other words, a merger is the combination of two companies into a single legal entity. In this article, we will look at different types of mergers that companies can undergo.

What are the two types of conglomerate mergers?

There are two types of a conglomerate merger: pure and mixed. A pure conglomerate merger involves companies that are totally unrelated and that operate in distinct markets. A mixed conglomerate merger involves companies that are looking to expand product lines or target markets.

What technology did Mobilink merge with?

The merger enabled the combination of Mobilink’s 2G and 2.5G technologies with Broadcom’s 802.11, Bluetooth, and DSP products.

What is market extension?

A market-extension merger is a merger between companies that sell the same products or services but that operate in different markets. The goal of a market-extension merger is to gain access to a larger market and thus a bigger client/customer base.

What is vertical merger?

Vertical merger: A merger between companies that are along the same supply chain (e.g., a retail company in the auto parts industry merges with a company that supplies raw materials for auto parts.) Market-extension merger: A merger between companies in different markets that sell similar products or services.

How do mergers happen?

Why do Mergers Happen? 1 After the merger, companies will secure more resources and the scale of operations will increase. 2 Companies may undergo a merger to benefit their shareholders. The existing shareholders of the original organizations receive shares in the new company after the merger. 3 Companies may agree for a merger to enter new markets or diversify their offering of products and services#N#Products and Services A product is a tangible item that is put on the market for acquisition, attention, or consumption while a service is an intangible item, which arises from#N#, consequently increasing profits. 4 Mergers also take place when companies want to acquire assets that would take time to develop internally. 5 To lower the tax liability, a company generating substantial taxable income may look to merge with a company with significant tax loss carry forward#N#NOL Tax Loss Carryforward A Net Operating Loss (NOL) or Tax Loss Carryforward is a tax provision that allows firms to carry forward losses from prior years to offset future profits#N#. 6 A merger between companies will eliminate competition among them, thus reducing the advertising price of the products. In addition, the reduction in prices will benefit customers and eventually increase sales. 7 Mergers may result in better planning and utilization of financial resources.

What is vertical merger?

A vertical merger occurs when companies operating in the same industry, but at different levels in the supply chain, merge. Such mergers happen to increase synergies, supply chain#N#Supply Chain Supply chain is the entire system of producing and delivering a product or service, from the very beginning stage of sourcing the raw materials to the final#N#control, and efficiency.

Why do companies seek mergers?

Summary. Companies seek mergers to gain access to a larger market and customer base, reduce competition, and achieve economies of scale. There are different types of mergers that the companies can follow, depending on their objectives and strategies. A merger is different from an acquisition. Mergers happen when two or more companies combine ...

How is merger different from acquisition?

Mergers happen when two or more companies combine to form a new entity, whereas an acquisition is the takeover of a company by another company.

What is the difference between a congeneric and a product extension merger?

Such mergers happen between companies operating in the same market. The merger results in the addition of a new product to the existing product line of one company. As a result of the union, companies can access a larger customer base and increase their market share. 2.

How can companies achieve economies of scale?

Companies can achieve economies of scale, Economies of Scale Economies of scale refer to the cost advantage experienced by a firm when it increases its level of output.The advantage arises due to the. such as bulk buying of raw materials, which can result in cost reductions.

How does a merger affect the market?

1. Raises prices of products or services. A merger results in reduced competition and a larger market share. Thus, the new company can gain a monopoly and increase the prices of its products or services. 2. Creates gaps in communication. The companies that have agreed to merge may have different cultures.

What is a conglomerate merger?

Conglomerate. A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.

What are the different types of mergers?

There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger . The term chosen to describe the merger depends on the economic function, purpose of the business transaction and relationship between the merging companies.

What are some examples of market extension mergers?

Example. A very good example of market extension merger is the acquisition of Eagle Bancshares Inc by the RBC Centura. Eagle Bancshares is headquartered at Atlanta, Georgia and has 283 workers. It has almost 90,000 accounts and looks after assets worth US $1.1 billion.

What is horizontal merger?

Horizontal Merger. A merger occurring between companies in the same industry. Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and ...

What is vertical merger?

A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one. Example.

What is product extension?

A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits.

What is M&A in financials?

What Are Mergers and Acquisitions (M&A)? Mergers and acquisitions (M&A) is a general term that describes the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions.

What is a tender offer?

In a tender offer, one company offers to purchase the outstanding stock of the other firm at a specific price rather than the market price. The acquiring company communicates the offer directly to the other company's shareholders, bypassing the management and board of directors. For example, in 2008, Johnson & Johnson made a tender offer to acquire Omrix Biopharmaceuticals for $438 million. Though the acquiring company may continue to exist—especially if there are certain dissenting shareholders—most tender offers result in mergers. 7

What is it called when a company takes over another company?

When one company takes over another and establishes itself as the new owner, the purchase is called an acquisition . 1.

What is merger and acquisition?

A merger is the combination of two firms, which subsequently form a new legal entity under the banner of one corporate name.

What is acquisition based on?

In a few cases, acquisitions are based on the cost of replacing the target company. For simplicity's sake, suppose the value of a company is simply the sum of all its equipment and staffing costs. The acquiring company can literally order the target to sell at that price, or it will create a competitor for the same cost. Naturally, it takes a long time to assemble good management, acquire property, and purchase the right equipment. This method of establishing a price certainly wouldn't make much sense in a service industry wherein the key assets (people and ideas) are hard to value and develop.

What is P/E ratio?

With the use of a price-to-earnings ratio (P/E ratio), an acquiring company makes an offer that is a multiple of the earnings of the target company. Examining the P/E for all the stocks within the same industry group will give the acquiring company good guidance for what the target's P/E multiple should be.

What is a vertical merger?

Vertical merger: A customer and company or a supplier and company.

What is accretion dilution?

The purpose of accretion/dilution#N#Accretion Dilution Accretion Dilution Analysis is a simple test used to determine whether a proposed merger or acquisition will increase or decrease post-transaction EPS.#N#analysis is to determine the effect of the acquisition on the buyer’s Pro Forma Earnings per Share (EPS)#N#Proforma Earnings per Share (EPS) Proforma earnings per share (EPS) are calculated to adjust for the impact of mergers & acquisitions. Guide to calculate proforma earnings, example, formula#N#. A transaction is deemed accretive if the buyer’s EPS increases after acquiring the target company. Conversely, a transaction is viewed as dilutive if the buyer’s EPS declines as a result of the merger. The buyer should estimate the effect of the target’s financial performance on the company’s EPS before closing a deal.

What happens when company A acquires company B?

When company A acquires company B, the balance sheet items of company B will be added to the balance sheet of company A . Combining the two companies’ financials will require several accounting adjustments, such as determining the value of goodwill, value of stock shares, and options, and cash equivalents. This section is also where various types of synergies#N#Types of Synergies M&A synergies can occur from cost savings or revenue upside. There are various types of synergies in mergers and acquisition. This guide provides examples. A synergy is any effect that increases the value of a merged firm above the combined value of the two separate firms. Synergies may arise in M&A transactions#N#come into play.

What is synergy in M&A?

A synergy is any effect that increases the value of a merged firm above the combined value of the two separate firms. Synergies may arise in M&A transactions. from the combination of the two businesses (cost savings) Timing for those synergies to be realized. Integration costs.

What happens when a stock is undervalued?

Where the buyer’s stock is undervalued, the buyer may decide to use cash instead of equity consideration since they would be forced to give up a significant number of shares to the target company.

What is merger and acquisition?

A merger is the “combination” of two companies, under a mutual agreement, to form a consolidated entity. An acquisition occurs when one company proposes to offer cash or its shares to acquire another company. In both cases, both companies merge to form one company, subject to the approval of the shareholders of both companies.

Why is finding a consideration agreeable to both parties important?

Finding a consideration agreeable to both parties is a crucial part of striking a deal. In contrast, the target company may want to receive equity because it might be perceived as more valuable than cash. Finding a consideration agreeable to both parties is a crucial part of striking a deal.

Why should you not mention enrolled in a course?

Try to avoid mentioning that you enrolled in the course because of potential financial benefits.

Why do interviewers ask questions?

Interviewers ask questions to learn more about you and find out things other than may be on your application or resume. Interviewers may ask about your course selection to learn more about your personality, interests and goals. This question may help them gauge your interest in or passion for a particular subject or field.

How to write a resume for a job?

Include information about your skills and natural talents in your answer. Consider mentioning how your skills align with the subject matter. Focus on your unique strengths that could contribute to your success in the course. Discuss the skills you hope to further develop through the course.

How to decide what to do with a degree?

1. Consider your interests. Think about your interests. Consider how your hobbies or other things you enjoy affect your decisions. Determine if there was a specific experience that led you to choose this course.

Do colleges require interviews?

Some colleges or universities require prospective students to complete interviews. A school may use this interview to determine a student's eligibility for a specific program, decide if the student deserves a scholarship or assess a student's admittance to the school in general. It's important to prepare for these interviews to provide thoughtful ...

Types of Mergers

Horizontal Mergers

• A horizontal merger is a merger between companies that directly compete with each other. Horizontal mergers are done to increase market power (market share), further utilize economies of scale, and exploit merger synergies. A famous example of a horizontal merger was that between HP (Hewlett-Packard)and Compaq in 2011. The successful merger between...

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Vertical Mergers

Market-Extension Mergers

Product-Extension Mergers

Conglomerate Mergers

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Why Do Mergers Happen?

Types of Merger

• 1. Congeneric/Product extension merger
  Such mergers happen between companies operating in the same market. The merger results in the addition of a new product to the existing product line of one company. As a result of the union, companies can access a larger customer base and increase their market share.
• 2. Conglomerate merger
  Conglomerate merger is a union of companies operating in unrelated activities. The union will take place only if it increases the wealth of the shareholders.

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Advantages of A Merger

Disadvantages of A Merger

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