Chapter 7: M&A

Question 1

kraft takes over cadbury

Answer 1

1. largest confectionary
2. dominated emerging markets
3. convenience stores

Question 2

5 reasons for M&A

Answer 2

1. increased market power
2. overcoming entry barriers
3. reduce costs/risks of new product development & incr speed to mkt
4. incr. diversification/reshape comp. scope
5. learning & developing new capabilities

Question 3

5 reasons for M&A: increased market power

Answer 3

• horizontal m&a
• vertical m&a
• related acquisitions

Question 4

8 problems w/ m&a

Answer 4

1. integration difficulties
2. inability to achieve synergy
3. inadequate evaluation of target
4. large debt
5. overdiversification
6. managers focused on acquisition
7. too large
8. active investors

Question 5

3 aspects of restructuring

Answer 5

1. downsizing
2. downscoping (divesting)
3. LBO (pe firms)