Finance Mergers

| 2010| Business strategy ii interim report on| MERGERS: Gillette P&G And HP-COMPAQ| MERGERS WHAT IS A MERGER? When cardinal or more(prenominal) companies, combine, generally by offering the stockholders of unrivaled company securities in the acquiring company in rallying for the surrender of their stock. Basically, it is a situation when twain companies become bingle. This ending is usually mutual between both firms. One summation one makes three: this equation is the special alchemy of a merger or an acquisition. The key principle behind subverting a company is to create sh beholder value over and above that of the sum of the two companies. Two companies to repelher argon more valuable than two separate companies - at least, thats the cogitate behind M&A. This rationale is particularly allure to companies when times are tough. Strong companies ordain act to buy other companies to create a more competitive, cost-efficient company. The companies will come together hoping to gain a greater mart share or to achieve greater efficiency.

Because of these potential benefits, luff companies will often agree to be purchased when they know they cannot wear alone DISTINCTION BETWEEN MERGERS AND ACQUISITIONS Although they are often uttered in the same breath and used as though they were synonymous, the impairment merger and acquisition mean slightly different things. When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition. From a legal point of view, the identify company ceases to exist, the buyer swallows the business and the buyers stock continues to be traded. In the pure sense of the term, a merger happens when two firms, often of about the same size, agree to go forward as a single new company sooner than remain separately owned and operated. This kind of action is more precisely referred to as a merger of equals. Both companies stocks are surrendered and new company stock is issued in its... If you want to get a full essay, order it on our website: Orderessay

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