Mergers and acquisitions

Question 1

Merger

Answer 1

2 firms agree to integrate operations on a relatively co-equal basis

Question 2

Acquisition

Answer 2

Firms buys a controlling share with intention of making the acquired firm part of its portfolio

Question 3

Most important factors for success (Deloitte 2019)

Answer 3

Effective integration
Economic certainty
Accurate valuation

Question 4

Components of decision making phase (M&A)

Answer 4

Strategic value, target analysis, Negotiate price

Question 5

Components of implementation (M&A)

(TIE)

Answer 5

Operational organisation, governance, transition, integration, evolution

Question 6

Horizontal acquisition

Answer 6

Acquirer and acquired companies compete in the same industry

Question 7

Vertical acquisition

Answer 7

Acquires supplier or distributor for additional control of value chain

Question 8

3 forms of restructuring

Answer 8

• downsizing
• downscoping
• restructuring through leveraged buyouts

Question 9

Puranam & Srikanth (2007)

hint: integration and innovation process

Answer 9

Integration helps acquirers use the acquired firms existing knowledge as input to own innovation processes