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Takeover considerations (reserve risk (uncertainty of liabilities (length…
Takeover considerations
impact on capital requirements
CR of combined entity
diversification
accumulation risk
size of acquired business
due diligence costs
purchase price
uncertainty of the liabilities
too high
hostile?
third party interest bidding up price
views of stakeholders
integration risks
IT systems
staff
morale
redundancies
swift entry into market
impact on tax position
reserve risk
under-reserved?
uncertainty of liabilities
length of tail
increases with years in operation