Mergers And Acquisitions

To further protect your online security, active links from Q&A has been disabled!

Mergers & Acquisitions................ Does anyone know of a recent merger or acquisition in the market. And can anyone, briefly describe the companies involved and whether it was a vertical or horizontal merger. Was it a hostile bid or a friendly merger? What are the benefits and costs to both parties involved? What are some different types of synergies and economies of scope and scale expected.

Best Answer

One more thing I left out was on hostile and friendly merger. Blackstone-Texas utility was friendly while Arcelor-Mittal was hostile which got into friendly states later. A friendly merger of the past was Nabisco being acquired by KKR partners then Kholberg Karvis later on who are backing Blackstone now.

Does anyone know of a recent merger or acquisition in the market. And can anyone, briefly describe the companies involved and whether it was a vertical or horizontal merger. Was it a hostile bid or a friendly merger? What are the benefits and costs to both parties involved? What are some different types of synergies and economies of scope and scale expected.

Best Answer

I had answered this question before but one thing I left out is the benifits and costs to parties. Companies do acquire for many reasons like growth, tax purposes, value maximization, asset maximizations, synergy, risk minimization etc;. These are the benifits. The costs are sometimes employee severence, reconfiguration of board even the cost of acquistion which happens at a premium calculated including the synergies possible after the acquisition and even risk.

Mergers & Acquisitions................ Does anyone know of a recent merger or acquisition in the market. And can anyone, briefly describe the companies involved and whether it was a vertical or horizontal merger. Was it a hostile bid or a friendly merger? What are the benefits and costs to both parties involved? What are some different types of synergies and economies of scope and scale expected.

Best Answer

One more thing I left out was on hostile and friendly merger. Blackstone-Texas utility was friendly while Arcelor-Mittal was hostile which got into friendly states later. A friendly merger of the past was Nabisco being acquired by KKR partners then Kholberg Karvis later on who are backing Blackstone now.

Does anyone know of a recent merger or acquisition in the market. And can anyone, briefly describe the companies involved and whether it was a vertical or horizontal merger. Was it a hostile bid or a friendly merger? What are the benefits and costs to both parties involved? What are some different types of synergies and economies of scope and scale expected.

Best Answer

Mergers and Acquisitions is a very complex field now, expecially with all the Private equity companies now in play. Blackstone picking up Texas Utility is the recent one where it is a complex financing deal, equity, lbo, debt combination. This is basically an acquisition, which basically is done to relieve the Acquiree from too much regulatory prerogatives. Once in private equity hands then the Acquiree don't have to face the SEC breathing down it's neck and has more time in hand to work on the Operations with no time lost in working out the regulatory dictums. This is the synergy and the economies of scope. One with more clarity is the Arcelor-Mittal merger where Mittal steel a Ductch Corporation acquired Arcelor steel and became the world's largest steel producer. This is a horizontal merger. They do produce different kinds of steel one higher priced and one lower priced. Then it is steel market and they can pool in and widen the market which is the synergy. Economies can start from a single board, single top level management, wider market, even sharing of wearhousing, marketing budgets etc;. They operate in geographically dislocated regions so clubbing them to achieve the above is difficult but if one need to cut on costs in the long run say during a slump can be done as described above. So reduction of executive compensation, marketing one agency instead of two is always acceptable. These adds nittly gritty, teeny weeny cents and dollars to the EPS which ultimately culminate in value to the stock holder. Then this is a neo liberal merger as it looks like not the theoretical type which you can find only in USA. I think this Arcelor-Mittal merger was a stock swap merger, where Mittal got control in two years time the Arcelor corporation. The theory of all this is little complicated one has to really undertake a course in a Finance major study or a full curricula of finance to learn it fully. Though you can try out a paper by Prof. Rappaport on Mergers and Acqusitions in one of the HBR old edition, do a library search and get this paper, if you are into higher levels of finance you will get to understand this paper. This is recommended. There are theoretically only two types of mergers andacqusitions. Stock swap and cash. A third one for modern finance is LBO, leveraged buy outs. LBO's were initally introduced to make it easier for employees to acquire and run their on companies and nowadays Corporate Raiders and Private Equity firms use it frivelously.

I am looking for a comprehensive dataset about Performance of International mergers, acquisitions and joint ventures of firms from any country. Basically I need the following data: 1- A set of companies (100 to 500) from a certain country (Japan, USA, UK, Australia, or other) 2- Within this set of companies I need to have the information about their international equity entry mode decisions: 2.1- Type of entry mode: merger, acquisition, joint venture 2.2- Type of management implemented, local or foreigner 2.2.1- Background of the CEO, general Manager (Finance, Marketing, Operations) 2.3- Total Sales of the first 2 (or more) years of operations 2.4- Size of the board of Directors I know some of this information may be difficult to find as comprehensive as I write here but at least I need to have a clue about where to look for reliable data about the world of merger and acquisitions in some country. Thanks!

Best Answer

wow, this is tough...try Ameritrade