mergers & acquisition

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MERGERS & ACQUISITION BY, Mallinath Shirahatti .

Merger:

Merger A transaction where two firms agree to integrate their operations on a relatively equal basis because they have resources & capabilities that together may create a stronger competitive advantage. ACQUISITION A transaction where one firm buys another firm with the intent of more effectively using a core competence by making the acquired firm a subsidiary within its portfolio of business.

FORMS OF M&a:

FORMS OF M&a Merger through absorption Merger through consolidation

REASONS FOR ACQUISITION:

REASONS FOR ACQUISITION Increased market power. Overcome entry barriers. Cost of new product development. Increased speed to market. Lower risk compared to developing new product. Increased diversification. Avoid excessive competition.

PROBLEMS IN ACHIEVENG SUCCESS:

PROBLEMS IN ACHIEVENG SUCCESS Integration difficulties. Inadequate evaluation of target. Large or extraordinary debt. Inedibility to achieve synergy. Too much diversification. Managers overly focused on acquisition. Too large.

ATTRIBUTES OF EFFECTIVE ACQUISION:

ATTRIBUTES OF EFFECTIVE ACQUISION Complementary assets or resources. Friendly acquisitions. Careful selection process. Maintain financial slack. Low to material debt. Flexibility. Emphasize innovation.

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