3. mergers and takeovers

merger

when two or more companies join to form a new one

takeover (/acquisition)

when one company buys another one

mergers & acquisitions department

a department of an investment bank which advises companies involved in mergers and takeovers

joint venture

when companies work together e.g. on a specific project or product, without a change of ownership

to diversify

to make more varied

diversification

a strategy of increasing sales by introducing new products into new markets (also: buying businesses in completely different fields)

to merge

to combine

market share

the percentage of total sales in a market that is earned by a specific company

competition

rivalry between companies

economies of scale

reduction in costs resulting from increased production

takeover bid

an offer made by one company to purchase another company

fees

money paid to investment banks for work done

customer base

all the individuals or organisations that regularly purchase goods or services from a company

synergy

combined production or productivity that is greater than the sum of the separate parts

(corporate) raider

a person or a company that tries to buy and sell other companies to make a profit

conglomerate

a large corporation operating in many different business areas

asset

stripping

leveraged buyout

to buy a company with borrowed money, usually by issuing bonds

junk bonds

bonds issued to pay for takeovers

white knight

another company that a business prefers to be acquired by

friendly takeover

if a company's board of directors agrees to the takeover

hostile takeover

if a company's board of directors does not agree to the takeover

black knight

a company that tries to acquire another company without its consent

grey knight

unsolicited bidder in a corporate takeover (a person or a company making a counter offer for a company already facing a hostile takeover bid)

greenmail

the practice of buying enough shares in a company to threaten a hostile takeover so that the target company will instead repurchase its shares at a premium

poison pill

issuing new shares at a big discount (a tactic used by companies to discourage hostile takeovers)

crown jewel

the most valuable unit of a corporation

a bid (e.g. a takeover bid)

an offer for sth

acquire

to get

to issue

to supply or distribute (something) for use or sale

raid

a hostile attempt to buy as many shares as possible on the stock market, hoping to gain majority

undervalued

having an underestimated financial value

thwart

to oppose successfully; to prevent

market leader

the firm in an industry with the largest market share

market challenger

the second best

horizontal integration

acquiring competitors in the same field of activity

vertical integration

acquiring companies involved in other parts of the supply chain (to make savings)

backward integration

acquiring suppliers of raw materials or components

forward integration

acquiring distributors or retail outlets

parent company

a company that controls or owns another company or companies

subsidiary

smaller companies owned by a parent company

core business

central and most important activity of a company

market capitalisation

the total market price of all company's ordinary shares

management buyout (MBO)

acquisition of the firm by its own management in a leveraged buyout