M&A

Question 1

What are the three types of mergers?

Answer 1

• Horizontal –> same industry
• Vertical –> combination of firms involved at different stages of the same businsess
• Conglomerate –> unrelated firms

Question 2

What are the two types of acquisition?

Answer 2

Friendly –> with the agreement of the board

Hostile –? w/o

Question 3

How is a hostile takeover usually accomplished by?

Answer 3

Tender offer –> shares at premium
Proxy fight –> tries to persuade shareholders to use their proxy votes to install a new management or take other types of actions