3.2.2 mergers and takeovers

Question 1

merger (def.)

Answer 1

when two or more companies combine to form a new company

Question 2

takeover (def.)

Answer 2

when one company purchases another company, often against its will

Question 3

advantages of mergers and takeovers

Answer 3

easier to expand into new market, diversify product portfolio and gain access to new technologies

achieve economics of scale

synergies : increase revenue, cost savings, better product portfolio

elimination of competition - increased market share

creates value for shareholders