StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Mergers and Acquisitons - Case Study Example

Cite this document
Summary
The main aim of the paper is to discuss about Mergers and Acquisitions. The paper gives a brief overview about mergers and acquisitions with some examples. Apart from this, the paper also discusses the merger of Daimler Benz and Chrysler Corporation. As part of the discussions, the series of events that took place as part of the merger are discussed…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.6% of users find it useful
Mergers and Acquisitons
Read Text Preview

Extract of sample "Mergers and Acquisitons"

Download file to see previous pages

A merger actually refers to a business combination of two or more firms in which only one firm survives and the other firm or firms go out of existence. In a merger, the surviving firm acquires the assets and liabilities of the other firm(s). A relevant example here is the recent merger of HDFC Bank and Times Bank. After the merger, Times Bank will go out of existence and expanded HDFC Bank will continue to exist. A merger takes place when the firms involved in the combination are of unequal size.

The larger or stronger firm continues to exist because of its stronger bargaining power and the smaller or weaker firms go out of existence. Four periods of economic history have witnessed very high levels of merger activity, which are called a merger waves. These periods are characterized by cyclical activity i.e. large number of mergers followed by relatively fewer mergers ((ICMR), 2003). The current period is called as the fifth wave. In the first three waves, merger activity was concentrated in the United States of America.

The fourth and the fifth waves were global in nature though the impact of the wave is most pronounced in the United States of America. The current merger wave began in 1992. This wave is marked by a large number of mega-mergers and cross-border mergers. Prior to this, there had been four different waves of mergers and acquisitions happening each being predominantly different. A famous example of the acquisition in the fourth wave of merger and acquisition row is the acquisition of Safeway, Britain's fourth largest supermarket group (Sky News, 2003) by William Morrison Supermarkets which operates in Central London and England (Arla Foods, 2003).

The major drivers for the current wave are deregulation, globalization and technology. The increasing levels of deregulation are enabling companies to enter or expand their operations in areas which had significant regulatory barriers. The sectors where the impact of the wave is most visible are telecommunications, entertainment and media, banking and financial services. Safeway PLC was going through a troubled phase of business and was also struggling to cope up with the competition from the other retail giants in UK.

As part of this struggle to compete, Safeway has also started experiencing the decline in its brand equity. All these struggles of Safeway were despite its strong national portfolio of having almost more than 450 outlets all across the United Kingdom. Going ahead, though William Morrison is a regional retail player in the United Kingdom having its strength in Midlands and in Northern Europe. Though William Morrison PLC is a regional player, the main strength of the company is its brand image and reputation in the market.

One of the fundamental motives that drive mergers and acquisitions is the growth impulse of firms. Firms that decide to expand have to choose between two generic growth strategies, one is the organic growth and the other being the acquisition driven growth. The former one is a slow,

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Mergers and Acquisitons Case Study Example | Topics and Well Written Essays - 3000 words”, n.d.)
Mergers and Acquisitons Case Study Example | Topics and Well Written Essays - 3000 words. Retrieved from https://studentshare.org/miscellaneous/1522216-mergers-and-acquisitons
(Mergers and Acquisitons Case Study Example | Topics and Well Written Essays - 3000 Words)
Mergers and Acquisitons Case Study Example | Topics and Well Written Essays - 3000 Words. https://studentshare.org/miscellaneous/1522216-mergers-and-acquisitons.
“Mergers and Acquisitons Case Study Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/miscellaneous/1522216-mergers-and-acquisitons.
  • Cited: 0 times

CHECK THESE SAMPLES OF Mergers and Acquisitons

The Effects of Merger and Acquisitions on the Recent Worldwide Financial Crisis

The effects of Merger and Acquisitions on the recent worldwide financial crisis Name: Institution: Introduction mergers and acquisitions are corporate terms, which refer to the coming together of two or more different entities, into a single trading entity, to take strategic business advantages such as economies of scale, increased market share and penetration, increased revenue, synergy due to better management and so forth.... hellip; Most importantly, though, mergers and Acquisitions come into play at times when firms are faced with a financial crisis that could lead to their collapse....
5 Pages (1250 words) Assignment

Merger, Acquisition, and International Strategies

This paper 'Merger, Acquisition, and International Strategies" focuses on the fact that mergers and acquisitions are common events in any economic setting.... Whether the markets are active or down mergers and acquisitions can be the main component of a corporation's strategy.... nbsp;… In the current marketplace, there are a number of factors that are driving great levels of mergers and acquisitions and they include powerful corporate balance sheets, cash wealth organizations seeking to merge their business situations, as well as low-interest charges that eventually permit greater advantage....
7 Pages (1750 words) Essay

Mergers and Acquisition Has a Means of Creating Shareholders Wealth

In modern market, mergers and acquisition (M&A) have become a common strategic tool for the development of business activities; through the M&A firms increase their investment capabilities but also their competitiveness towards their rivals; at least, these are the initial intentions of shareholders that agree to proceed to a relevant procedure.... The study focuses on the examination of the following issues: a) how can mergers and acquisition benefit a firm's shareholders, b) which are the effects of mergers and acquisition on a firm's equity' c) are there specific measures taken for the increase of shareholders' wealth in the case of a merger or acquisition, d) which is the role of state in the development of the relevant procedure - control by antitrust authorities, e) does the leadership style affects the development of mergers and acquisition' And f) does the n....
11 Pages (2750 words) Essay

Merger versus IPO or Acquisition

rivate Sales through mergers and Acquisitions Kudler Fine Foods also has the option of expanding its operations through mergers or opting to acquire another firm within its line of operations.... On the negative side, mergers and acquisition provide narrower market opportunities compared to an IPO.... Reasons for frequent failure in mergers and Acquisitions: A comprehensive analysis.... In mergers, Acquisition and IPO: Opportunities and Threats to Each of the Approaches Details: al Affiliation:Date of SubmissionMerger, Acquisition and IPO: Opportunities and Threats to Each of the ApproachesPublic Sales through IPO According to the orthodox economic theorists, IPOs provide businesses with greater liquidity as compared to merger and acquisitions....
2 Pages (500 words) Essay

Mergers and Acquisitions Strategy for Companies

mergers and acquisitions (M&As) have today emerged as an important strategy for companies to perform their operations in a competitive and proficient manner.... It has often been observed in this regard that M&As are used as competitive strategies by organisations to mitigate the… Undoubtedly, the M&A practices performed by modern day organisations tend to be a complex phenomenon which is influenced by various factors which can be explained with reference to few recent real life Concerning this particular aspect, this paper presents a case study analysis of three recent mergers at a cross-border level, i....
11 Pages (2750 words) Essay

Mergers and Acquisitions: Leveraged buyouts

osenbaum, J & Pearl, J 2013, Investment Banking: Valuation, Leveraged Buyouts, And mergers & Acquisitions, John Wiley, Hoboken.... Leveraged buyouts enable companies acquire other companies without having to commit high percentage of their finances (Jansen, 2008).... Leveraged buyouts are a… Junk bonds are high yield type of bond with high default risk (Mobius, 2007)....
1 Pages (250 words) Essay

A Restructuring Process in Companies

Other reasons… ch necessitates going to the process of mergers and acquisitions are aimed at increasing profitability, increasing competitiveness, to diversify, fiscal consolidation etc.... Whereas growth is one of the main reasons which lead to one company merging with or acquiring other there can be many other reasons as well....
5 Pages (1250 words) Assignment

Financial management;Mergers and Acquisition

One of them was between burger King the USA corporate giant merging with its cross border rival Canadian multinational restaurant chain, Tim Horton to form the world's third largest… Burger king relocated and changed its citizenship to Canadian amid complaints from the various stakeholders....
5 Pages (1250 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us