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Merger Forms mergers-acquisition-process (Takeover 624930-200 (Buying by …
Merger Forms
Acquisition
are usually friendly => cooperation
Reasons for an acquisition
To increase market share
For economies of scale, diversification
Cost reductions
As a Way to Enter a Foreign Market
Problems with acquisitions
Resulting firm is too large
Too much diversification
Integration difficulties
Merger
Types of Merger
based on two financing methods
Purchase Mergers
Consolidation Mergers
based on the relationship between the two companies
Conglomeration
Product-extension merger
Market-extension merger
Congeneric mergers
Vertical merger
Horizontal merger
Stocks are surrendered and new company stock is issued in its place
Two firms join forces to move forward as a single new entity
Takeover
Buying by takeover bid
Raid
It can be friendly and unwelcome
By a larger company for a smaller one
to find value in a target company
to eliminate the competition
