Net Present Value, Mergers and Acquisitions
Trident University
Module 5- SLP
FIN501
Dr. Glenn Tenney
Net present Value, Mergers and acquisitions When brainstorming on the possible ideas of mergers or acquisitions it was easy at first to automatically think similar corporations within the same market either small or big or even in direct competition. Upon researching and reviewing the required readings I realized there are numerous types of mergers and acquisitions that could and should be considered in the terms of better business for my company (Target), for the market, and for the consumers in general. The Target Corporation is an American retailing company. It is the second largest discount retailer behind Walmart. With that being said it would at first be a natural thought maybe to think of a merger with Walmart, but as Target being second to them it wouldn’t necessarily be a merger as it would be an acquisition by Walmart and probably wouldn’t make the most business sense even if both were allowed to remain as separate entities. Beyond that certain regulatory bodies would probably find a merger or acquisition to constitute a monopoly and threaten competition within the respective industry. So what would be a company worth merging with or acquiring? One such company that comes to mind which I believe would be considered a Horizontal merger would be the Kmart Corporation as they are in direct competition. Kmart is listed as the 3rd largest discount retail chain behind Walmart and Target. Kmart has struggled in the last 10 years with re-invention, re-modeling, bankruptcy, and the successful utilization of Sears stores after their merger with Sears/Roebuck Corporation. One adversity that could be face is that though Kmart has experienced struggles as of late the merger between Target and Kmart could be viewed still as a monopoly of some sort or severely limiting the market and choices consumers have to either Walmart or Target/Kmart. Another company for consideration which I would have
Module 5- SLP
FIN501
Dr. Glenn Tenney
Net present Value, Mergers and acquisitions When brainstorming on the possible ideas of mergers or acquisitions it was easy at first to automatically think similar corporations within the same market either small or big or even in direct competition. Upon researching and reviewing the required readings I realized there are numerous types of mergers and acquisitions that could and should be considered in the terms of better business for my company (Target), for the market, and for the consumers in general. The Target Corporation is an American retailing company. It is the second largest discount retailer behind Walmart. With that being said it would at first be a natural thought maybe to think of a merger with Walmart, but as Target being second to them it wouldn’t necessarily be a merger as it would be an acquisition by Walmart and probably wouldn’t make the most business sense even if both were allowed to remain as separate entities. Beyond that certain regulatory bodies would probably find a merger or acquisition to constitute a monopoly and threaten competition within the respective industry. So what would be a company worth merging with or acquiring? One such company that comes to mind which I believe would be considered a Horizontal merger would be the Kmart Corporation as they are in direct competition. Kmart is listed as the 3rd largest discount retail chain behind Walmart and Target. Kmart has struggled in the last 10 years with re-invention, re-modeling, bankruptcy, and the successful utilization of Sears stores after their merger with Sears/Roebuck Corporation. One adversity that could be face is that though Kmart has experienced struggles as of late the merger between Target and Kmart could be viewed still as a monopoly of some sort or severely limiting the market and choices consumers have to either Walmart or Target/Kmart. Another company for consideration which I would have
References: 1. http://www.investopedia.com/university/mergers/mergers1.asp#axzz25LNT6Lq4, http://www.investopedia.com/university/mergers/mergers3.asp 2. http://www.lma-consultinggroup.com/article_ma.html