Business
UNIVERSITY OF ST. MARK AND ST. JOHN, PLYMOUTH
MBA 608 – BUSINESS ECONOMICS ASSIGNMENT 1D
THE POSSIBLE ANTICOMPETITIVE EFFECTS OF MERGERS AND ACQUISITIONS AND EVALUATION OF THE EFFECTIVENESS OF EXISTING REGULATIONS AIMED TO REDUCE ANTICOMPETITIVE PRACTICES IN GHANA.
BY:
COLLINS FRIMPONG OFORI
Definition of Mergers and Acquisition
The Main Idea
One plus one makes three: this equation is the special alchemy of a mergers or an acquisition.
The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies - at least, that's the reasoning behind Mergers and Acquisition. This rationale is particularly alluring to companies when times are tough. Strong companies will act to buy other companies to create a more competitive, cost - efficient company.
The companies will come together hoping to gain a greater market share or to achieve greater efficiency. Because of these potential benefits, target companies will often agree to be purchased when they know they cannot survive alone.
Distinction between Mergers and Acquisitions
Although they are often uttered in the same breath and used as though they were synonymous, the terms mergers and acquisition mean slightly different things. When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition.
From a legal point of view, the target company ceases to exist; the buyer "swallows" the business and the buyer's stock continues to be traded. In the pure sense of the term, a mergers happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "mergers of equals." Both companies' stocks are surrendered and new company stock is issued in its place. For example, both Daimler - Benz and
MBA 608 – BUSINESS ECONOMICS ASSIGNMENT 1D
THE POSSIBLE ANTICOMPETITIVE EFFECTS OF MERGERS AND ACQUISITIONS AND EVALUATION OF THE EFFECTIVENESS OF EXISTING REGULATIONS AIMED TO REDUCE ANTICOMPETITIVE PRACTICES IN GHANA.
BY:
COLLINS FRIMPONG OFORI
Definition of Mergers and Acquisition
The Main Idea
One plus one makes three: this equation is the special alchemy of a mergers or an acquisition.
The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies - at least, that's the reasoning behind Mergers and Acquisition. This rationale is particularly alluring to companies when times are tough. Strong companies will act to buy other companies to create a more competitive, cost - efficient company.
The companies will come together hoping to gain a greater market share or to achieve greater efficiency. Because of these potential benefits, target companies will often agree to be purchased when they know they cannot survive alone.
Distinction between Mergers and Acquisitions
Although they are often uttered in the same breath and used as though they were synonymous, the terms mergers and acquisition mean slightly different things. When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition.
From a legal point of view, the target company ceases to exist; the buyer "swallows" the business and the buyer's stock continues to be traded. In the pure sense of the term, a mergers happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "mergers of equals." Both companies' stocks are surrendered and new company stock is issued in its place. For example, both Daimler - Benz and