Mergers And Acquisitions
Páginas: 2 (382 palabras)
Publicado: 7 de marzo de 2013
MERGERS & ACQUISITIONS
Natalia Ruiz Galindo
DEFINITION:
• M&A transactions bring separete companies together to form larger ones. • A merger is when to companies combine to form a new company.• An acquisition is when a company buys another company, but no new company is formed.
MAIN GOAL:
The main goal of acquiring a company “is to create shareholder value over and above that of the sumof the two companies”, since the value of two companies together is higher than each company separately.
Difference between Mergers and Acquisitions
• It is said to be an Acquisition when onecompany purchase another and “establish itself as the new owner”, therefore the company that was bought “ceases to exist”. • It is said to be a merger when to companies usually of the same size decideto join together to become a bigger company, “both companies' stocks are surrendered and new company stock is issued in its place”.
Benefits of merging:
• Staff reductions: “money saved fromreducing the number of staff” • Economies of Scale: When buying supplies the orders will be bigger since the company has grown and bigger orders give the buyer opportunity to negotiate better deals withthe suppliers.
• New Technology: “By buying a smaller company with unique technologies, a large company can maintain or develop a competitive edge.” • Improved market reach and company visibility:When two companies merge they can “reach new markets and grow revenue and earnings”
Types of Mergers
• Horizontal merger: Two companies that are direct competitors which sell the same product, andshare the same markets. • Vertical merger : “A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker.” • Market-extension merger : “Two companiesthat sell the same products in different markets. ”
• Product-extension merger : “Two companies selling different but related products in the same market.” • Conglomeration - “Two companies that...
Natalia Ruiz Galindo
DEFINITION:
• M&A transactions bring separete companies together to form larger ones. • A merger is when to companies combine to form a new company.• An acquisition is when a company buys another company, but no new company is formed.
MAIN GOAL:
The main goal of acquiring a company “is to create shareholder value over and above that of the sumof the two companies”, since the value of two companies together is higher than each company separately.
Difference between Mergers and Acquisitions
• It is said to be an Acquisition when onecompany purchase another and “establish itself as the new owner”, therefore the company that was bought “ceases to exist”. • It is said to be a merger when to companies usually of the same size decideto join together to become a bigger company, “both companies' stocks are surrendered and new company stock is issued in its place”.
Benefits of merging:
• Staff reductions: “money saved fromreducing the number of staff” • Economies of Scale: When buying supplies the orders will be bigger since the company has grown and bigger orders give the buyer opportunity to negotiate better deals withthe suppliers.
• New Technology: “By buying a smaller company with unique technologies, a large company can maintain or develop a competitive edge.” • Improved market reach and company visibility:When two companies merge they can “reach new markets and grow revenue and earnings”
Types of Mergers
• Horizontal merger: Two companies that are direct competitors which sell the same product, andshare the same markets. • Vertical merger : “A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker.” • Market-extension merger : “Two companiesthat sell the same products in different markets. ”
• Product-extension merger : “Two companies selling different but related products in the same market.” • Conglomeration - “Two companies that...
Leer documento completo
Regístrate para leer el documento completo.