Site Loader

Mergers
and acquisitions (M&A) are defined as buildup of companies. Differentiating
the two terms, Mergers is
the consolidation of two companies while Acquisitions are one company taken
over to another company. M&A is one of the important to any corporate
sector.The logic is behind M&A is commonly given is that two separate
companies together create more value compared to being on an individual stand.

2.         PROCESS FOR
MERGER & ACQUISITION

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

a)     Acquire  assets

b)     Purchasing common shares

c)     Exchange of shares for assets

d)     By exchanging shares for shares

 

3.         TYPES OF MERGER
AND ACQUISITION

Mostly
five commonly catagraly of Merger &Acquisition for a business combination
known as mergers which is conglomerate merger, horizontal merger, market
extension merger, vertical merger and product extension merger.                                                   

3.1       HORIZONTAL
MERGER

A merger occurring between
companies which have the same kind of  industry. Horizontal merger is a business
consolidation that occurs between two corporation  they operate similar working on product
plus  joint competitor  provide  the almost similer kind  of service.

                                                                                                               Page 1/4

 

 

 

 

 

 

 

a.) 
Example

A merger between Rooh afza
and the Pepsi company division, for example, would be horizontal in nature.
Objective of horizontal merger has developed  a new, bigger  company with effectively in market share.

3.2       VERTICAL
MERGER

When the vertical merger is merging  of companies engaged in different stages of
the production.we can say that  company has
acquired its upstream or firm downstream then vertical merger.In imagining the
competitor nor complementary to each other.

b.)  Examples

 A car
company combines together work for a supplier would be an example of a vertical
merger.

 

 

 

 

 

 

                                                                                                                                                                       Page 2/4

 

 

3.4       CONGLOMERATE

 

A merger between firms that are involved in
completely  irrelevant business
activities. Conglomerate mergers  are two
catagogry one pure and second is mixed. Pure conglomerate mergers incurred
firms with no any such kind of 
similarities, in other hand, in mixed conglomerate mergers incurred
firms that are looking for product increase, or market extensions. The purpose
of this merger to lower cost purchase cost material,including lower distribution
cost occurred.

 

3.5       MARKET EXTENSION
MERGERS

A market expend merger takes place between
two companies  deal same nature products,
but in different markets.Basic issue  expend
of marker merger is  making sure the  merging companies get directly approach to achieve
big market through throughout provide better services of the consumer.

c.)  Example

In common example market extension merger is
the acquisition of shares RBC Centura and Eagle Bancscherse.

 

                                                                                                                                                                   Page 3/4

4.   BENEFITS OF MERGER & ACQUISITION

Some advantage  of M&A purpose has to do with ability to another
ability do with capabilities.which is.

a)    
More expand economies of scale,through  to purchase raw materials in greater
quantities.

b)   
Increased market share. For example, two
companies are in the same industry, bringing their collateral combine may  built large market share.

c)    
Increased distribution capabilities.By
expanding geographically, reduced labor costs.

d)   
Improved labor expertise.

e)    
Generally greater than one alone, making new
investments possible.

4.   POTENTIAL DISADVANTAGE

In Merger & Acquisition
have the advantage while is has been seen some potential disadvantage. Which
describe as given below.

a)    The
possibility taken place negative reaction of intact merger or acquisition,
which shows  the company’s stock price
did not performMergers
and acquisitions (M) are defined as buildup of companies. Differentiating
the two terms, Mergers is
the consolidation of two companies while Acquisitions are one company taken
over to another company. M is one of the important to any corporate
sector.The logic is behind M is commonly given is that two separate
companies together create more value compared to being on an individual stand.

2.         PROCESS FOR
MERGER & ACQUISITION

a)     Acquire  assets

b)     Purchasing common shares

c)     Exchange of shares for assets

d)     By exchanging shares for shares

 

3.         TYPES OF MERGER
AND ACQUISITION

Mostly
five commonly catagraly of Merger for a business combination
known as mergers which is conglomerate merger, horizontal merger, market
extension merger, vertical merger and product extension merger.                                                   

3.1       HORIZONTAL
MERGER

A merger occurring between
companies which have the same kind of  industry. Horizontal merger is a business
consolidation that occurs between two corporation  they operate similar working on product
plus  joint competitor  provide  the almost similer kind  of service.

                                                                                                               Page 1/4

 

 

 

 

 

 

 

a.) 
Example

A merger between Rooh afza
and the Pepsi company division, for example, would be horizontal in nature.
Objective of horizontal merger has developed  a new, bigger  company with effectively in market share.

3.2       VERTICAL
MERGER

When the vertical merger is merging  of companies engaged in different stages of
the production.we can say that  company has
acquired its upstream or firm downstream then vertical merger.In imagining the
competitor nor complementary to each other.

b.)  Examples

 A car
company combines together work for a supplier would be an example of a vertical
merger.

 

 

 

 

 

 

                                                                                                                                                                       Page 2/4

 

 

3.4       CONGLOMERATE

 

A merger between firms that are involved in
completely  irrelevant business
activities. Conglomerate mergers  are two
catagogry one pure and second is mixed. Pure conglomerate mergers incurred
firms with no any such kind of 
similarities, in other hand, in mixed conglomerate mergers incurred
firms that are looking for product increase, or market extensions. The purpose
of this merger to lower cost purchase cost material,including lower distribution
cost occurred.

 

3.5       MARKET EXTENSION
MERGERS

A market expend merger takes place between
two companies  deal same nature products,
but in different markets.Basic issue  expend
of marker merger is  making sure the  merging companies get directly approach to achieve
big market through throughout provide better services of the consumer.

c.)  Example

In common example market extension merger is
the acquisition of shares RBC Centura and Eagle Bancscherse.

 

                                                                                                                                                                 Page 3/4

4.   BENEFITS OF MERGER & ACQUISITION

Some advantage  of M purpose has to do with ability to another
ability do with capabilities.which is.

a)    
More expand economies of scale,through  to purchase raw materials in greater
quantities.

b)   
Increased market share. For example, two
companies are in the same industry, bringing their collateral combine may  built large market share.

c)    
Increased distribution capabilities.By
expanding geographically, reduced labor costs.

d)   
Improved labor expertise.

e)    
Generally greater than one alone, making new
investments possible.

4.   POTENTIAL DISADVANTAGE

In Merger & Acquisition
have the advantage while is has been seen some potential disadvantage. Which
describe as given below.

a)    The
possibility taken place negative reaction of intact merger or acquisition,
which shows  the company’s stock price
did not perform

Post Author: admin

x

Hi!
I'm Erica!

Would you like to get a custom essay? How about receiving a customized one?

Check it out