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Mergers and acquisitions can be value creators or value destroyers
Member rating: No Rating | Words: 3000 | Submitted: Sun Dec 02 2007
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(a) "Mergers and acquisitions can be value creators or value destroyers" Discuss the above statement using relevant empirical evidence. Corporate mergers happen when two companies combine. There are two situations in merging. An agreed merger is when both companies want to merge and when one company seeks to control another company without its agreement, it is called a hostile takeover. It is up to the shareholders of the target company to approve a merger. They usually approve if it is recommended by the board, or if they stand to make a substantial profit from the shares in the new company. Mergers happen since there are many motivations such as expansion. A larger, growing company may try to take over its smaller rivals in order to grow bigger. In some cases it is the smaller company that wants to expand, but is held back by lack of capital. Smaller companies seek a larger...
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