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CHAP 9 : ACQUISITION : STRATEGIC ISSUES AND REGULATIONS - Coggle Diagram
CHAP 9 : ACQUISITION : STRATEGIC ISSUES AND REGULATIONS
Growth strategies
merger/acqn
JV
Internal dvlpmt (organic growth)
Synergies
- extra benefit resulting from acqn either from higher inflow or/and low risk
Cost synergy
result from being able to nego better terms w suppliers, sharing pdn facilities & HQ function
Financial synergy
occur where combine 2 comp results in improvements to fin actvt
eg : risk reduction due to diversification, tax reduction by 2 firms combined (loss in 1 firm reduce tax paid by the other), nego of better int rate due to higher bargaining power, a firm w excess cash acquire firm with promising project tapi insufficient fund
Revenue synergy
higher due to sharing cust contact & increased market power
Working rship
Due diligence (DD)
Financial DD
verify fin info provided (eg updated fin forecast)
Commercial DD
assmt of competitors & detailed analysis of assumption that lie behind the bus plan
Legal DD
check for any legal concern (eg pending litigation)
Failure of acqn
is due to
Overvaluation