Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

FINALS > Business Finance ( Mergers, Acquisitions, & Takeovers) > Flashcards

Business Finance ( Mergers, Acquisitions, & Takeovers) Flashcards

1
Q

occurs when a buyer acquires all or part of assets or business of a selling entity, and where both parties are actively assisting in the purchase transaction.

A

Acquisition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

occurs when two companies combine into one entity

A

Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

corporations in which one corporation transfer
all its assets to the other, which continues to exist.

A

Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

one corporations “swallows”
the other, but the shareholders of the
swallowed company receive shares of the
surviving corporation.

A

Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

is a transaction that result in
the transfer of ownership and control of a
corporation.

A

Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

When one company purchases another
company of an approximately similar
size. The two companies come together to
become one.

A

Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Two companies usually agree to ______
when they feel that they can do something
together that they can not do one their
own.

A

Merge/ Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Types of merger

A

Horizontal Merger

Vertical Merger

Conglomerate Merger

Concentric Merger

Statutory

Subsidiary

Consolidation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A merger that happens between
companies belonging to the same
industry.

A

Horizontal Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The companies have businesses
in the same space and are generally
competitors to each other.

A

horizontal merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

is a feature of an
industry which consist of a large number of
small firms or fragmented industry.

A

horizontal merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

occurring between
companies producing similar
products, goods and offerings similar
services.

A

Horizontal merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

This type of merger occurs
frequently as a result of larger
companies attempting to create more
effective economies of scale.

A

Horizontal Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Examples of Horizontal merger

A

Lipton India and Brooke Bond.

Bank of Mathura with ICICI Bank.

BSES Ltd with Orissa Power Supply Company.

Associated Cement Companies Ltd Damodar Cement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

is a merger between
companies that produce different goods or
offer different services for one common
finished product.

A

Vertical Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

The companies operate at different levels
in the supply chain of the same industry.

A

Vertical Merger

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The motivation behind such mergers (vertical mergers)

A

cost efficiency, operational efficiency,
increased margins and more control over
the production or the distribution process.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

A merger between two companies
producing different goods and
services for one specific finished
products.

A

Vertical Merger

19
Q

The merger of the firm that have
actual or potential buyer-seller
relationship.

A

Vertical merger

20
Q

example scenario of vertical merger

A

Car manufacturer
purchasing a tire company.

21
Q

real examples of vertical merger

A

Time Warner Incorporated, a major cable operation, and the
Turner Corporation, which produces CNN, TBS, and other
programming.

Pixar-Disney Merger

22
Q

A merger between companies that operate in
completely different and unrelated industries.

A

Conglomerate Merger

23
Q

is between
companies with totally nothing in common.

A

Pure conglomerate

24
Q

is between
companies looking for market or product
extensions.

A

mixed conglomerate

25
Q

A merge between firms that are involved
in totally interrelated business activity.

A

Conglomerate merger

26
Q

real examples of conglomerate merger

A

PepsiCo-Pizza Hut; Proctor &
Gamble-Clorox.
Walt Disney Company and the American
Broadcasting Company.Procter & Gamble Corporation

27
Q

A merger of firms which are into similar type
of business.

A

Concentric Merger

28
Q

often called a
congeneric merger, is the merging of firms
that operate in the same industry

A

Concentric merger

29
Q

do not
have a mutual relationship (such as a buyer-seller relationship)

A

Concentric Merger

30
Q

example of congeneric merger

A

Citigroup’s acquisition of Travelers
Insurance.

31
Q

is one in which all the
assets and liabilities of the smaller company is
acquired by the bigger (acquiring) company.
As a result, the smaller target company loses
its existence as a separate entity.

A

Statutory Merger

32
Q

is one in which the target company becomes a subsidiary of the bigger acquiring company. This happens because the target company may have a known brand or a
strong image which would make sense for the
acquiring company to retain.

A

Subsidiary Merger

33
Q

is one in which both
the companies lose their identity as separate
entities and become a part of a bigger new
company. This is generally the case with both
the companies being of the same size.

A

Consolidation Merger

34
Q

Ways of merger – A merger can take
place in following ways:

A

By purchasing of assets

By purchase of common shares

By exchanging of shares for assets

By exchanging of shares for shares

35
Q

give 5 examples of REASONS OF MERGER

A

product improvement
goodwill
diversification of risk
future goals
mutual benefits
maximizing profits
expansion of business
economy of scale
increase market share
cost maximization

36
Q

Benefits of merger

A

Diversification of product and service offerings

Increase in plant capacity

Larger market share

Utilization of operational expertise and research and
development (R&D)

Reduction of financial risk

37
Q

Why do mergers fail?

A

Lack of human integration

Mismanagement of cultural issues

Lack of communication

38
Q

When one company takes over another and
clearly established itself as the new owner, the
purchase is called an

A

Acquisition

39
Q

is generally considered negative
in nature.

A

Acquisition

40
Q

A corporate action where an acquiring
company makes a bid for an acquiree. If the
target company is publicly traded, the
acquiring company will make an offer for the
outstanding shares.

A

takeover

41
Q

A takeover attempt that is strongly resisted by the target firm

A

Hostile takeover

42
Q

Target company’s
management and board of directors agree to a merger or
acquisition by another
company.

A

Friendly takeover

43
Q

Why should firms takeover?

A

To gain opportunities of market growth more quickly
than through internal means

To seek to gain benefits from economies of scale

To seek to gain a more dominant position in a national
or global market

To acquire the skills or strengths of another firm to
complement the existing business

To acquire a speedy access to revenue streams that it
would be difficult to build through normal internal
growth

To diversify its product or service range to protect
itself against downturns in its core markets

FINALS (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions