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Takeovers and mergers (Types of mergers and acquisitions (BY THE FORM OF…
Takeovers and mergers
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Reasons
Synergy: by combining business activities, performance will increase and costs will decrease.
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By buying out one of its suppliers or one of the distributors, a business can decrease a level of costs.
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Improved financing. Larger businesses might have better access to sources of financing in the capital markets than smaller firms.
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Definitions
A takeover(acquisition) refers to one firm gaining control of another by buying over 50% of its shares.
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A joint venture involves two separate companies cooperating for a limited time on a particular project, but maintaining their own identities.
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