Merger And Aquisition

M&A is explained as creating greater stockholder value. manage makeer interests ar central because these transactions must have the sycophancy of a majority of stockholders and stockers are unlikely to vote their shares in favor of a sale, puechase or merger unless they believe that they decease behind benefit. However, the real motivation behind M&A is about al rooms a mixture in which financial, structual, institutional, and hitherto personal aims are present. Companies make acquisitions to grow more than rapidly, to gain understand over theor raw materials, to obtain youthful technology, to pump up their stock, to take advantage of weaknesses in others, to turn, etc. Greed, or self-importance intesest, is the primary reason to establish an mood for M&A. It plays dandy and bad roles for motivating M&A. ?If the phoner and the management group is greed, they suffer use M&A to gain the securities industry share. Since each company has its special guest group s and product reputation, it has its own market share in the industry. wiz company can increase its market share it does non have with M&A. For example, HP acquired Compaq in 2001. HP could increase its market share of printer, scanner and cameras because Compaq had a big customer undercoat for these products. Compaq can help HPs shake up into the commercial-printing market.

The lucrative imaging and printing unit will go from universe 43% of HPs business to 25% of the combine company. ?Since the economic environmen is uncertain, a company should find a commission to resisit to the economic shock. Greed makes the company struggle to go bad even under the economic reccessio! n. The most effective way is to diversify its products. Greed can force the comany to complemnting its product offerings on and on for diversity through M&A. later on the products are diversified, the company can still keep operating hearty when encountering an receding in one or some of its products. HP is whole in the consumer machines but Compaq is stong in the business PCs. After M&A, HP can also...If you want to get a liberal essay, order it on our website: BestEssayCheap.com

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