A 3 Hrm822 Indasgn3 101005
HRM822
Individual Assignment 3 (20%)
1. In 2008 British Wallboard, the parent company of Stonewall has seen enough of the volatility in the Canadian construction materials market and sells the company to a competitor, US Corp. Its subsidiary, Canadian Wallboard, and Stonewall will merge into one organization. What are the benefits of the merger to British Wallboard? US Corp? Canadian Wallboard? Stonewall? (10 marks)
Mergers:
The mergers of organizations takes place when two corporations combine their resources-assets and liability to become one entity. The willingness of the business relationship to take place should be mutual so that the merger can be a success and not an acquisition that will interfere with the operations of the corporations (Zain, 2008).
Benefits That Will Be Experienced By the Four Companies:
There are certain benefits that will be derived from the merger that will boost the operations of the organization. The Stonewall Company and the Canadian Wallboard Company, as the main corporations that are merging will have a great creation of the shareholder value that will be over that of the same two corporations separately. This is based on the fact that two companies working jointly are more valuable in comparison to the companies working distinctly. To the non subsidiaries- the British Wallboard and the US Corporation, they are bound to gain from the merger relationship that has been established. This is based on the fact that the main organizations still holds shares in the subsidiary company. The Subsidiary organizations will come together to gain a greater market share in the target market. This will lead to achieving of greater efficiency in the company operations. These potential benefits will also target the main companies to create great value generation through the gaining of cost efficiency (Benefits, 2010).
2. What are the risks to each of the four companies of this merger? (10 marks) Risks That the Four Companies Will Face:
The main
Individual Assignment 3 (20%)
1. In 2008 British Wallboard, the parent company of Stonewall has seen enough of the volatility in the Canadian construction materials market and sells the company to a competitor, US Corp. Its subsidiary, Canadian Wallboard, and Stonewall will merge into one organization. What are the benefits of the merger to British Wallboard? US Corp? Canadian Wallboard? Stonewall? (10 marks)
Mergers:
The mergers of organizations takes place when two corporations combine their resources-assets and liability to become one entity. The willingness of the business relationship to take place should be mutual so that the merger can be a success and not an acquisition that will interfere with the operations of the corporations (Zain, 2008).
Benefits That Will Be Experienced By the Four Companies:
There are certain benefits that will be derived from the merger that will boost the operations of the organization. The Stonewall Company and the Canadian Wallboard Company, as the main corporations that are merging will have a great creation of the shareholder value that will be over that of the same two corporations separately. This is based on the fact that two companies working jointly are more valuable in comparison to the companies working distinctly. To the non subsidiaries- the British Wallboard and the US Corporation, they are bound to gain from the merger relationship that has been established. This is based on the fact that the main organizations still holds shares in the subsidiary company. The Subsidiary organizations will come together to gain a greater market share in the target market. This will lead to achieving of greater efficiency in the company operations. These potential benefits will also target the main companies to create great value generation through the gaining of cost efficiency (Benefits, 2010).
2. What are the risks to each of the four companies of this merger? (10 marks) Risks That the Four Companies Will Face:
The main