ESP233 U8

Mergers and acquisitions

to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can aid, finance, or help an enterprise grow rapidly in its sector or location of origin or a new field or new location without creating a subsidiary, other child entity or using a joint venture.

merger

the absorption of one firm by another. The acquiring firm retains its name and identity, and it acquires all of the assets and liabilities of the acquired firm

acquisition

is the purchase of one business or company by another company or other business entity

Consolidation

occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently

merger

happens when two firms agree to go forward as a single new company rather than remain separately onwned and operated- "merger of equals"

confidentiality bubble

wherein the flow of information is restricted pursuant to confidentiality agreements.

A raid

Buying as many of a company's stocks as possible on the stock market

a takeover bid

a public offer to a company's stockholders to buy their stocks at a certain price during a limited period of time

bidder

the firm deciding to take over another firm is refered to as the ___. The ___ offers to pay cash or securities to obtain stocks or assets of target company

Horizontal merger

two companies making the same products combined

Vertical merger

a company either acquires or mergers with another company in an immediately-related stage of prodcution and distribution

diversification

a company acquires another company in an entirely different sphere

asset-stripping

"to acquire additional plants, equipment or other properties of target company. Buying a company for less than the value of its assets, then selling those assets to make a profit is called_

synergy

combined production or productivity greater than the sum of separate parts

reverse takeover

a smaller firm will acquire management control of a larger and/or longer-established company and retain the name of the latter for the post acquisition combined entity.

reverse merger

a privately held company (often one that has strong prospects and is eager to raise financing) buys a publicly listed shell company, usually one with no business and limited assets.

forward integration

it is a merger with or the acquisition of one's marketing outlets

Backward intergration

a merger with or the acquisition of one's suppliers

Acquisition accounting

a full consolidation, where the assets of a subsidiary company which has been purchased are included in the parent company‘s balance sheet, and the premium paid for the goodwill is written off against the year‘s earnings.

leverage buyouts

takeovers using borrowed money are called _____

management buyouts

____ are when a company is bought by its existing managers

dawn raid

consists of buying shares through several brokers early in the morning, before the market has time to notice the rising price, and before speculators join in

bought up

In the past, a lot of small banks were __________ by larger ones.

cross-border

A takeover of a foreign company is known as a __________ deal.

conglomerates

collections of unrelated businesses combined into a single corporate structure.

Leverage

having a large proportion of debt compared to equity capital