Slide 8

Question 1

What are mergers and acquisition?

Answer 1

This is an activity whereby two organizations of equal size unite to
form a new unit, or a larger firm acquires another called acquisition

Question 2

What are the types of mergers and acquisitions?

Answer 2

1. Horizontal acquisitions
2. vertical acquisitions
3. related acquisitions
4. conglomerate acquisition

Question 3

What are horizontal acquisitions?

Answer 3

This is where one organization acquires another in the same industry.

Question 4

What are vertical acquisitions ?

Answer 4

This is where a firm acquires another within its value chain. For
example, an organization in say education acquires its supplier of
furniture, though not the same industry

Question 5

What are related acquisitions ?

Answer 5

A firm acquires another in a related industry

Question 6

What is conglomerate acquisition?

Answer 6

This is where a firm acquires another, but in an unrelated industry for
financial prospect

Question 7

What are the motives of mergers and acquisitions?

Answer 7

1. economies of scale
2. reducing competition
3. sharing complementary resources
4. entering new market
5. risk reduction
6. removal of inefficient management