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M & As pt 1 - Coggle Diagram
M & As pt 1
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SUCCESS OF MERGES
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- poor post-acqui integration
- excessive fin. leverage
- delays in disposing non-core divisions
- poor business fit
- corporate culture clash
- divisions at board lvl
- regulatory delays
- inadequate due diligence
- loss of key staff & customers
- higher-than-expected costs
- brand value loss
- poor communication
- wrong reasons for merge
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WHEN DO THEY MAKE SENSE
- Friendly acquisitions > hostile takeovers
- resource complimentarity
- exit strategy for maturing industry
- when you're the target
- acquiring competitive adv in a diff
point on the value chain
- other modes of entry aren't suited
DIV, WC, NAV
[1] Dividends
- Target S/Hs may value dividends
- merge would dilute target DPS
- issue convertible debentures, pref ord
shares or pref shares
[2] Working Capital
- target has desired liquidity
[3] Net Asset Value
- initial starting point for negotiations
- effect of takeover on NAV disclosed
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