Merger and Acquisitions

Question 1

What are the following issues related to?

• Corporate governance
• Form of payment
• Legal issues
• Contractual issues
• Regulatory approval
• Culture issues

Answer 1

Mergers and acquisitions.

M&A requires know-how and competencies to create value. Especially how to handle the entire process.

Question 2

During the tech-bubble what was the a special payment that was used a lot in M&As?

Answer 2

A lot of M&A’s were payed with utilizing shares. Small companies were acquired through utilizing shares.

Question 3

Which of the below describes the acquisition value?

a) Value estimated on the basis of the results obtained by the management and the opportunities for growth that the company could reasonably expect, relying upon technological, marketing and managerial resources that are available to it.
b) The value of a company determines from the point of view of a specific acquiring company.
c) Indicates the value that can be attributed to a business considering the valuations that presumably would be formulated by generic potential buyers.

Answer 3

b)

Question 4

Which of the below describes the fair market value?

a) Value estimated on the basis of the results obtained by the management and the opportunities for growth that the company could reasonably expect, relying upon technological, marketing and managerial resources that are available to it.
b) The value of a company determined from the point of view of a specific acquiring company.
c) Indicates the value that can be attributed to a business considering the valuations that presumably would be formulated by generic potential buyers.

Answer 4

c)

Question 5

Which of the below describes the stand-alone value?

a) Value estimated on the basis of the results obtained by the management and the opportunities for growth that the company could reasonably expect, relying upon technological, marketing and managerial resources that are available to it.
b) The value of a company determines from the point of view of a specific acquiring company.
c) Indicates the value that can be attributed to a business considering the valuations that presumably would be formulated by generic potential buyers.

Answer 5

a)

Question 6

What does the exchange ratio express?

Answer 6

It’s the number of shares offered by the acquiring company in relation to each share of the target company.

Question 7

A max exchange ratio imply:

a) Positive (or at least neutral) benefit from merger for acquiring shareholders
b) Negative benefit from merger for acquiring shareholders
c) No benefits from merger for acquirer shareholders
d) Positive (or at least neutral) benefit from merger for merging shareholders

Answer 7

c)

Question 8

A min exchange ratio imply:

a) Positive (or at least neutral) benefit from merger for acquiring shareholders
b) Negative benefit from merger for acquiring shareholders
c) No benefits from merger for acquirer shareholders
d) Positive (or at least neutral) benefit from merger for merging shareholders

Answer 8

a)