Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Question
Chapter 20, Problem 1DQ
Summary Introduction
To name: The three industries in which mergers are prominent.
Introduction:
Merger:
An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for the expansion of business, its share in the market and value of shareholders.
Expert Solution & Answer
Answer to Problem 1DQ
The three industries in which mergers are prominent are –
Telecommunications
Pharmaceuticals and Health care
Public Utilities
Explanation of Solution
Mergers are common in many industries such as, computer, technology, telecommunications, public utilities, medicines, healthcare and energy. It helps expand businesses and competition in the markets.
In telecommunications industry, the growth is so rapid that a lot of funds are required for the growth of the business. Mergers help companies to acquire more funds and procure and use resources mutually.
In healthcare and pharmaceuticals industries, many firms of small and medium size merge to meet the competition in the markets and industry.
In retail sector and public utility industries, mergers and acquisitions seem attractive for capturing and increasing market share.
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