Mergers and acquisitions Flashcards
Mergers and acquisitions what do you discuss in the intro?
A merger is combining two companies into essentially one, an acquisition is when one of the companies takes control of the other, thus they are one. M&A’s can be done for growth, synergy or competitive advantage. Companies will also use them to grow financially or become more financially stable.
After the intro of Mergers and acquisitions what do you talk about?
(under motives for synergy) Synergy is the idea that by combining two companies, they will perform better than if they were still separate.
Cost synergy- This is when companies share to get rid of duplicates of what they have essentially, for example, cost synergy two companies may get rid of a factory or staff
Revenue synergy- This is when companies offer a complementary product when you purchase a product
operational synergy- when companies share business practices, efficiencies or distribution processes with one another
After discussing different types of synergies what do you talk about?
Gaining Market power, discuss how its advantageous to own more of market, buying out your competition etc… talk about some cons too
After discussing gaining market power, what do you discuss next?
Diversification
After diversification what do you talk about?
Technological synergy and discuss sharing tech, data, r and d times, innovation, growth (think insurance again)
What do you talk about after technological synergy?
Tax losses that you can buy a company whom has tax loss to utilise meaning the company can carry the tax over to the next year
