Corporate Growth Flashcards
tr corporate alliances + synonym
poslovna zavezništva; mergers & acquisitions
how can companies grow?
internally (increasing its sales) or externally (corporate alliances)
tr merger
združitev
def acquisition
a purchase of another company (through the purchase of their shares) - no matter of how large the stake is
def+tr joint ventures
two companies create something new together.
joint ownership (mešano podjetje) // joint project by contract (skupna vlaganja)
def merger
two companies agree to join together to form a new one
in theory, it should be a 50/50 share swap, but in practice that varies
no sale agreement involved
why do companies keep M&A-ing? (8) (benefits of M&As)
- to increase their market share (price-setting)
- to gain new insider knowledge
- opportunity to access new markets
- to eliminate competition
- to make more profit
- synergies
- staff overhaul (reorganisation, keeping only the best ones)
- cost-cutting (bulk buying, economies of scale or scope, sharing R&D costs)
def stake
synonym for share
def takeover
a company acquiring a majority stake in another company (50%)
(= bid = offer)
def friendly takeover
the company that is taken over is compliant, and it is negotiated
often regarded as mergers
def hostile takeover
the company that is taken over is not compliant
happen by launching a raid (attack) - usually regarded as an acquisition
done by buying the shares on the stock exchange
acquiring company syonym
acquirer, bidder
target company synonym
acquiree, (bid) target
which are the main steps the acquirer takes?
- define strategic goals
- decide on a target
- valuate the target
- ensuring funds and funders
- establish confidence in data: due diligence (skrbni pregled)
tr economies of scale
ekonomije obsega
where the most M&A happen?
automotive and pharma industries
what are the main problems before an M&A happens?
- frictions in management
- maintaining secrecy (of the M&A)
- ↑ share price
- ↓ employees
- different cultures - due diligence
what is an antonym of a merger?
de-merger
what are the main problems after an M&A happens?
- implementation
- layoffs, redunancies
- reorganising the workplace
- establishing uniform corporate culture
def horizontal and vertical integration
vertical = a company buying out its suppliers and/or customers horizontal = combining of two companies that produce similar goods/services
def leveraged buyout (LBO) +tr
buyout using borrowed funds
odkup z zadolžitvijo
def domestic acquisition
an Acq in the same country the acquirerer is from
def cross-border acquisition
an Acq in another country than the acquirerer is from
def management buyout (MBO) +tr
if the buyer is the company’s own management
managerski prevzem
why are conglomerates inefficient?
because they lose focus on their core business
def+ synonym competition authorities
antitrust regulators
montitoring and controlling merging and buying activities to prevent anti-competitive concentrators on the market