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Mergers & Acquisitions

Für den Kurs Mergers & Acquisitions

Für den Kurs Mergers & Acquisitions

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Dario Bianchi
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Dario Bianchi
Diese Lernkarten bieten eine Einführung in die Grundlagen von Mergers & Acquisitions (M&A) und deren wirtschaftliche Bedeutung. Sie behandeln verschiedene Arten von Fusionen wie horizontale, vertikale und konglomerate M&A, sowie wichtige Konzepte wie Synergien, Tender Offers und Arbitrage. Die Karteikarten beleuchten auch historische M&A-Wellen in den USA, deren treibende Kräfte und Gründe für ihr Ende. Praktiker und Studierende der Betriebswirtschaftslehre profitieren von den detaillierten Erklärungen und Beispielen, um die komplexen Prozesse und Strategien hinter Unternehmensfusionen zu verstehen.
Flashcards
19
Students
1
Language
German
Category
Micro-Economics
Created / Updated
25.12.2013 / 25.12.2013
  • 1  / 19

Flashcards

Why might a bidder obtain a toehold?

solve-free-rider problem, recoup bidding costs

What is the free-rider-problem?

If there are many small shareholders, each of them considers himself/herself not pivotal (not decisive) for the success of the tender offer.
What is the winner’s curse? How can a bidding firm avoid this problem?

winner is most likely overpaying for the target -> paying in stock

Explain some resons why a merger can decrease value?

management entrenchment, agency costs of free cash-flow

Explain some resons why a merger can increase value?

synergies, transaction costs, disciplinary rate!

List motives for inorganic growth

Maturing product line, Value creation through horizontal & vertical mergers, Acquisition of resources or capabilities, diversification, Economies of scale, Improved capacity utilization, Economies of scope
Describe the fifth major merger movements that have occurred in the United States, indicating the major forces involved, and what factors lead to their ending.

Strategic mergers 1992-2000: Technology, Globalization, Positive economic environment, wide us of stock-for-stock transaction, MEGAMERGERS, End: Internet bubble

Describe the fourth major merger movements that have occurred in the United States, indicating the major forces involved, and what factors lead to their ending.

Deal decade 1981-1989: Surge in the economy and stock market, international competition, LBOs, Bust-up acquisitions (A corporate buyout in which the acquirer sells off a piece of the company in order to pay down some of the debt used to finance the initial buyout, End: Government actions, Bankruptcy of Drexel Burnham, Dvelopment of powerful takeover defenses, Economic recession associated with Gulf War

Describe the third major merger movements that have occurred in the United States, indicating the major forces involved, and what factors lead to their ending.

Conglomerate mergers 1965-1970: Declining relative importance of horizontal&vertical mergers, product extension mergers, End: Antitrust laws, punitive tax laws, declining stock prices

Describe the second major merger movements that have occurred in the United States, indicating the major forces involved, and what factors lead to their ending.

Second merger movement 1922-1929: Vertical mergers, Product-extension, market-extension, „merging for oligopoly“, End: Economic slowdown in 1929
Describe the first major merger movements that have occurred in the United States, indicating the major forces involved, and what factors lead to their ending.

1895-1904 Market consolidation: Horizontal mergers, transformation of regional firms to national firms, economies of scale, „merging for monopoly“, End: some combinations failed to realize their expectations, economy went into recession

How does an Arbitrageur invests in a stock Merger?

In a stock merger, risk arbitrageur take a long position in the target stocks and shorts the acquirer stock to hedge out market risk

List the two steps of a two-tire offer!

1st tier typically for cash (to obtain 50% or more) 2nd tier may offer a smaller value because control is already established (often paid in debt securities), “Three-piece suitor”: Initial toehold, tender offer to obtain control, freeze- out purchase of minority shareholders

Characterize a conglomerate Merger?

Firms engaged in unrelated types of business activities, Financial conglomerates operate as internal capital markets providing funds and undertake strategic planning but do not participate in operating decisions.
What are the three types of Conglomerate Mergers?

Product extension mergers or concentric mergers to broaden Product lines geographic market extension mergers pure conglomerate mergers

Characterize a vertical merger!

Firms at different stages of production or operation, Information and transaction efficiency (planning for inventory & production, costs of searching for contracting, prices,...), Depending on the costliness of market exchange & contracting

Characterize a horizontal merger!

Firms in same kind of business activity, Benefits from economies of scale and synergies from combining best practices , Government regulation due to potential anticompetitive effects (Fear of monopoly power)

What is a tender offer?

Direct offer to shareholders to sell (tender) their shares, Specified price, Friendly or hostile (offer made without approval of the board)

Describe Mergers!

Negotiated deal, Friendly parties (mostly), Mutually agreeable decision to combine companies

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