Lernkarten

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Sprache English
Stufe Universität
Erstellt / Aktualisiert 29.12.2014 / 29.12.2014
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Fenster schliessen

I. Introduction

Topics:

  • Basic terminology
  • Types of mergers
  • Risk arbitrage
  • Importance of M&A and recent deals
  • Merger outlook
  • Legal framework
Fenster schliessen

Definition of merger (3)

  • Negotiated deal
  • Mostly friendly parties
  • Mutually agreeable decision to combine companies
Fenster schliessen

Tender offer (3)

  • Direct offer to shareholders to tender (sell) their shares at a specified price
  • Obtaining >50% of shares (Approval required)
  • Friendly or hostile
Fenster schliessen

Types of tender offers (4)

  • Conditional or unconditional
    • e.g. min. 50% interest
  • Restricted or unrestricted
    • e.g. 70%, "any-or-all"
  • Contested offer
  • Two-tier offer or three-piece suitor: e.g.
    • Initial toehold
    • 1st tier for cash (to obtain >50% interest)
    • 2nd tier at a lower value (often paid in dept securities)
Fenster schliessen

Problem of minority shareholders (2)

If buyout not completed:

  • Freeze-in problem
  • Possible legal actions

Solution: Minority squeeze-out

Fenster schliessen

Types of mergers (3)

  • Horizontal
  • Vertical
  • Conglomerate
Fenster schliessen

Horizontal merger (3)

  • Same kind of business
  • Benefits from economies of scale and synergies
  • Government regulation due to fear of monopoly power
Fenster schliessen

Vertical merger (2)

  • Firms of different stage of production/operation
  • Benefits from information- and transaction efficiency (e.g. inventory, production, prices, procurement)