Merger and Aquisition
Executive Summary:
A marriage is the coming together of two people to become one, but each of them has their own individuality and in order to make the marriage a success compromises need to be made. This is also true for mergers and acquisitions. When two companies come together both of them have their individual work cultures and identities but in order to work together successfully they have to make some changes. Only then can a merger or an acquisition be successful. This is very simply put. However it is not so simple, nor is it just a matter of making changes. In fact there are a lot of things that go into making a merger successful. These are the issues that one needs to take care of while going in for a merger or an acquisition The first chapter of this report seeks to explain what the various terms used to classify the coming together of two corporations means. There can be various types of mergers namely horizontal, vertical, conglomerate, concentric and consolidation mergers.
There are certain terms that are peculiar to mergers and acquisitions like golden parachutes, greenmail and so on. These terms are explained in the chapter. There are some problems that are likely to occur at every stage in the merger or acquisition process, an overview of most of the problems is given. Now we move onto the important issues that one needs to look at in order to be successful or in order to carry out a merger. It is imperative to carry out a due diligence process before the merger takes place since this helps the merging or acquiring company to assess the value of the target company. The due diligence must be thorough, only if the result is positive then one should continue the merger process. Synergy is extremely crucial to a merger or an acquisition because that is what will ensure that the merger is a success. Synergy means that 2+2 > 4, which is to say that the companies must create a higher value
A marriage is the coming together of two people to become one, but each of them has their own individuality and in order to make the marriage a success compromises need to be made. This is also true for mergers and acquisitions. When two companies come together both of them have their individual work cultures and identities but in order to work together successfully they have to make some changes. Only then can a merger or an acquisition be successful. This is very simply put. However it is not so simple, nor is it just a matter of making changes. In fact there are a lot of things that go into making a merger successful. These are the issues that one needs to take care of while going in for a merger or an acquisition The first chapter of this report seeks to explain what the various terms used to classify the coming together of two corporations means. There can be various types of mergers namely horizontal, vertical, conglomerate, concentric and consolidation mergers.
There are certain terms that are peculiar to mergers and acquisitions like golden parachutes, greenmail and so on. These terms are explained in the chapter. There are some problems that are likely to occur at every stage in the merger or acquisition process, an overview of most of the problems is given. Now we move onto the important issues that one needs to look at in order to be successful or in order to carry out a merger. It is imperative to carry out a due diligence process before the merger takes place since this helps the merging or acquiring company to assess the value of the target company. The due diligence must be thorough, only if the result is positive then one should continue the merger process. Synergy is extremely crucial to a merger or an acquisition because that is what will ensure that the merger is a success. Synergy means that 2+2 > 4, which is to say that the companies must create a higher value