Login | Join Network
Lost Password














A password will be emailed to you.

How to Make Mergers and Acquisitions Work

A
merger is a combination of two or more companies, such that all the
stakeholders can enjoy the benefits.  An
acquisition is when a company buys most, if not all, of the stakes of the
target company. Acquisitions can either be friendly or hostile. Friendly
acquisition is where the target company agrees to combine and becomes with the
parent company while hostile acquisition is when there is forced acquisition
but in both cases there is a premium given to the target company as
compensation.

Mergers
and acquisitions can be of benefit to both the acquiring and target company but
it also has its fair share of challenges. Some of the benefits include
achieving economies of scale, garnering tax advantages, and eliminating
inefficiencies.
Penetration
into new geographic regions and also it provides managers with new career
growth opportunities.

Objectives

The main objective of mergers and acquisitions
is to aid with finance, or help with the rapid growth of an enterprise in its
existing market or in an absolutely new field. Most mergers don’t work but
those who advocate mergers will
argue that the merger will cut costs or boost revenues by more than enough to
justify the price premium.

 

               It can
sound so simple for example just combine computer systems then bring together a
few departments use sheer size to force down the price of supplies thus making
the merged giant more profitable than its parts but that is not always the
case.

 Discussion on the video

I have chosen a video from Google about who
profits from mergers and acquisitions. (
http://www.5min.com/Video/Who-Profits-from-Mergers-and-Acquisitions-412104337)

This video will discuss the thoughts of what
goes thru employees minds in times of mergers and acquisitions and how the
profitability should be judged in case management decides to go through with
it. The profitability mostly depends on the stocks of the target company and
how much the acquiring company is willing to invest.

 Summary
of the training video

This video starts by giving companies different options on
how they can use their excess cash and one of the ways is to buy another
company. He goes on to say that at times mergers do not create stakeholders
value mostly when both the acquiring and targets companies are big companies.
On the other hand if the target company is small it tends to be quite
profitable.

 Reference

(http://www.5min.com/Video/Who-Profits-from-Mergers-and-Acquisitions-412104337

  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
  • LinkedIn
  • PDF
  • RSS
  • email

More on Entrepreneur21.net:

CEO's on Corporate Social Responsibility
The traditional role of a CEO is to increase the p...
Attend ECON 2011 @ Los Angeles
Whether your company has been serving customers f...
Allocate IT Training Budget – For a Well Trained Team
IT Training is a part of any IT organization’s pro...
Social Media Marketing – Connect Faster
Social media marketing describes use of social net...
Employee to Entrepreneur
Getting laid off is not always a bad sign. As a ma...
Techniques to Reach Target Audience
As an entrepreneur, you are ready to face the big ...

Leave a comment

Disclaimer: All pages within GenMembers network are expressions of the opinions of the site operator only, and no representation of factual accuracy is being made. The content is intended to create interest in various topics for our readers, who are in turn encouraged to conduct their own independent research. This site is not related to: Entrepreneur Media, Entrepreneur Magazine, Entrepreneur of the Year, Entrepreneur's Partner, Hispanic Entrepreneur, Entrepreneur.com, Entrepreneurs.com Entrepreneur's Only, The Entrepreneur's Source, Entrepreneur's Notebook or any of the many companies that use the word entrepreneur in there trade name. Please see our website Terms of Use for further information concerning your use of the site.