Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 26, Problem 2Q
Summary Introduction
To determine: The Significance of merger with regard to likelihood of governmental intervention and possibilities of operating synergy.
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“Reasons for merger that will result in wealth maximization are strategic benefits, market power, economics of scale, economies of vertical integration and taxation benefits”.
Describe how any four out of the five factors mentioned may contribute to the success of a merger business exercise
What are horizontal, vertical, congeneric, andconglomerate mergers? Are the different typesof mergers equally likely to pass muster with theJustice Department?
Define each of the following terms:b. Horizontal merger; vertical merger; congeneric merger; conglomeratemerger
Chapter 26 Solutions
Intermediate Financial Management (MindTap Course List)
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Similar questions
- Discuss the underlying theories and empirical evidence on the value creation from horizontal mergers. How do other firm- and deal- characteristics interact with the valuation effects of such mergers?arrow_forwardWhat is a merger? Discuss if it is an effective strategy or not.arrow_forwardCritically discuss whether, in general, mergers and acquisitions are successful in practice.arrow_forward
- Create a table to compare and contrast the three types of corporate mergers: horizontal, vertical, or conglomerate. Describe the characteristics of the corporations that are involved (products, consumers, etc.) and the benefits of this type of merger for each corporation.arrow_forwardWhat merger-related activities are undertaken byinvestment bankers?arrow_forwardFind a recent merger transaction that failed due to regulatory concerns over market share concentration and reduction of consumer alternatives. Do you support the regulatory concerns? Explain briefly the transaction and your reasoning.arrow_forward
- What is the difference between merger and enter into a joint arrangement?arrow_forwardWhat is meant by contemplating a merger?arrow_forwardIt is often difficult to draw a distinctive line between mergers and takeovers, and the terms tend to be used rather loosely to describe the process by which firms combine. In principle, a merger may be defined as a combination of firms of approximately equal standings on the basis of an agreement between their respective managements who recognize some mutual advantage in he arrangement. A merger can result in a new company being formed or one of the two companies absorbs the other. Required: i. Describe various types of mergers and critically discuss the motives for undertaking mergers and takeover. ii. Identify the organ(s) or institution(s) that regulates/approves the mergers and acquisitions in Tanzania and discuss all steps/procedures to be undertaken by the merging companies in Tanzania as required by the regulator for a merger to be successful. iii. Identify any recent Merger and Acquisition in Tanzania, discuss its type and the motive behind it.arrow_forward
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