Preview

Johnson And Questcor Pharmaceuticals: Business Combinations

Good Essays
Open Document
Open Document
928 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Johnson And Questcor Pharmaceuticals: Business Combinations
Running Head: BUSINESS COMBINATIONS

Business Combinations

Introduction
For this paper, selects Johnson & Johnson (J&J) and Questcor Pharmaceuticals the US companies to acquisition. This paper explains the best combination method of Johnson & Johnson for expanding the corporation through acquiring Questcor Pharmaceuticals. Johnson & Johnson pay $15 million in goodwill of Questcor Pharmaceuticals during acquisition. Moreover, it explains the reason behind the selection of combination method and the way to grow the business. It also analyzes the requirement of accounting for the combination method of business and also prepares consolidated financial statements for the date of acquisition. In addition, it also determines …show more content…
Moreover, through this business combination method the company will effectively grow the business through cover the more market and enter in the new markets (Whittington & Delaney, 2007). This business combination method wills also effective for the company because the joining or acquisition of these two companies creates additional vales of both that is called as synergy value. The five synergies values that could happen as a result of the proposed acquisition are discussed …show more content…
This horizontal business combinations method should be focused on covered international and domestic financial accounting standards that are stated in the FASB (Financial Accounting Standards Board) of USA in International Financial Reporting Standard No. 3 (IFRS 3R) (Dabbah & Lasok, 2008). Moreover, while prepare the consolidated financial statements for the date of acquisition, calculates of a value of acquiring company is also considered. The calculation of acquiring firm (Questcor) value summarized as
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Better Essays

    Financial Strategy for Kudler Fine Foods
    • 1180 Words
    • 5 Pages

    Financial Strategy for Kudler Fine Foods

    According to Financial Management, acquiring another firm in the same industry has variables with multi-faucet advantages and disadvantages, depending on the execution of the plan. “Businesses grow in one of…

    • 1180 Words
    • 5 Pages
    Better Essays
    Read More
  • Better Essays

    LDR 300 Week 5 Team Assignment Merger Dilemma Paper
    • 999 Words
    • 3 Pages

    LDR 300 Week 5 Team Assignment Merger Dilemma Paper

    When two or more companies are combined, they form a merger. This is an effective corporate strategy. All the capabilities of companies forming the mergers are combined to serve as a unique motivation for the venture. Other motivational factors for them are to acquire greater market share and enhance competition. In order to improve a business’s performance, mergers are typically formed.…

    • 999 Words
    • 3 Pages
    Better Essays
    Read More
  • Good Essays

    Worldcom Case: Bankruptcy Protection
    • 945 Words
    • 4 Pages

    Worldcom Case: Bankruptcy Protection

    The dominant value creating function is the main reason for the firm engagement in inorganic growth. Through this mode of growth, the firm improved the value of shareholders since the power and efficiency of the merged companies are better than the individual companies working separately. As a result, the value was captured in the anticipated synergies where the results of these mergers were evident based on the accelerated growth in revenues, profits, and assets. In addition, the mergers, especially the merger between world com and MCI, brought together two firms that have complementary strengths and assets (Hitt & Harrison, 2001). Through these mergers, the shareholders’ value was improved through operational cost reduction including, the reduction in reduced leased lined costs, and elimination of expensive terminal charges both locally and internationally. Also, the mergers eliminated duplication of activities and investments, adoption of best practices while sales and marketing forces have meshed thus making the established market channel to be better established. Moreover, the mergers and acquisitions helped the firm minimize the competition in the market, instantly add new brands to the firm’s product portfolio, instant access to fresh customer base and expansion to new geographical locations, gaining economies of scale over a reduced period of time, injection of new and diversified management skills and significant reduction of time to market thus giving the firm the competitive advantage (Gaughan, 2013). All these merger outcomes are value-adding since they enable merger process meet the characteristic of the value adding…

    • 945 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Eco 365 Week 3: Explain The Difference Between Conglomerates And Mergers
    • 954 Words
    • 4 Pages

    Eco 365 Week 3: Explain The Difference Between Conglomerates And Mergers

    The following paragraphs will discuss week four 's readings that covered vertical mergers, horizontal mergers, conglomerates, and joint ventures. Companies use mergers and joint ventures to increase profitability and efficiency. The following paper will go over the three alliances as well as a joint venture and how it differs from the mergers. Each business arrangement is used to attempt an improvement for the company, the important thing to remember is which will be most beneficial and why.…

    • 954 Words
    • 4 Pages
    Better Essays
    Read More
  • Better Essays

    Huffman Trucking Company Case Study
    • 1693 Words
    • 7 Pages

    Huffman Trucking Company Case Study

    The integration of the two organizations can be challenging as well as costly. Decisions must be made on who will manage the organization, employee rationalization, vendor rationalization, facilities, and so on. Similar to an acquisition the combined financials of the new organizations must be secure enough to ensure payment of current obligations. Projected cost savings may not be realized thereby impacting the financials of the organization. An intangible threat to completing a merger is the melding of two corporate cultures who may have had very different ways of conducting business even though they were in the same…

    • 1693 Words
    • 7 Pages
    Better Essays
    Read More
  • Best Essays

    Decide Assignment On Merck's Acquisition Of Medco
    • 2738 Words
    • 11 Pages

    Decide Assignment On Merck's Acquisition Of Medco

    The manufacturer like Merck-Medco, Lilly-PCS were concerned about losing access to their industries to PBM. PBMs are companies that administer drug benefit programs for employers and health insurance carriers. Their contracts are directly to managed care organizations, self-insured employers, insurance companies, Medicare, and almost all Federal and State government health benefits plans. To make the benefit plan more affordable PBM lowered their claims processing fees and also offered rebate retention. PBM also processed prescription drug claims, reviewed prescriptions, offered generic and branded medicines through mail services as well. Hence, due to PBM’s efficiency of delivering and processing the drug cut overall cost of health care benefits, the manufacturer industry got a big hit in their business. So, in the early 1990S, a large growth of managed care changed the health care industry that also had a heavy impact on…

    • 2738 Words
    • 11 Pages
    Best Essays
    Read More
  • Satisfactory Essays

    Acct 571
    • 316 Words
    • 1 Page

    Acct 571

    After reviewing all information and calculations the acquisition could occur with the initial layout of $250,000 and based on the data provided in the excel spreadsheet the recommendation is the company should purchase Corporation B. This decision was base on the data which shows Corporation B’s NPV and IRR rates are significantly higher and is the better investment option. Corporation B will definitely be more profitable to the organization by executing this…

    • 316 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    Morrison Takeover Safeway
    • 3582 Words
    • 15 Pages

    Morrison Takeover Safeway

    Rappaport (1998) stated that, the basic objectives of making acquisition is identical to any other investment associated with a company’s overall strategy, i.e. to add value. In practise, the motivation for expansion through merges, and the diverse range of issue such as action rises by using discounted cash flow technique.…

    • 3582 Words
    • 15 Pages
    Good Essays
    Read More
  • Good Essays

    Vertical Mergers
    • 660 Words
    • 3 Pages

    Vertical Mergers

    ECO/365October 27, 2014Daniel PuenteMergers and Joint VenturesWhile companies are faced with many challenges one of the most challenging are when companies merge. There are several different types of mergers which these companies must consider horizontal, vertical, and conglomeration. A horizontal merger occurs when two companies from the same industry consolidate their assets and eliminate competition allow them to reach potential higher gain within market. Vertical mergers occur when two or more companies operating at different levels are producing goods or services for a particular industry. The goal…

    • 660 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Inbev Case Study
    • 1062 Words
    • 5 Pages

    Inbev Case Study

    Third, the merger company could also benefit from economies of scale. The economies of scale come from manufacturing on cost side and also on decision side which means the company could make global decision. Finally, chances are that the culture of the new co- could incorporate the highlights from both company cultures. However, this can be only the drawback to this merger which leaves chance to culture conflict. For the rest part of the report, we will quantify this effect to calculate the synergy benefit.…

    • 1062 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Effect of Business Acquisition to Get Competitive Advantage Based on the Case Study: Acquisition of Somerfield by Co-Operative Group
    • 1719 Words
    • 7 Pages

    Effect of Business Acquisition to Get Competitive Advantage Based on the Case Study: Acquisition of Somerfield by Co-Operative Group

    Business acquisition is one of the most vital tools to expand an existing business effectively. An acquisition takes place when an existing company buys another company which has more or less similar operating activities and ended up controlling it. It is clearly different from merger which is the integration of a business with another and sharing the control of the combined businesses collectively. Mergers and acquisitions (M&As) have long been considered as an one of the most highly appreciated method to achieve the desired growth rate and satisfying the key stakeholders. With rapid advances in science and technology competition for the same marker has increased significantly and to remain competitive in the market business organizations have considered M&As as an imperative strategic tool. Rising of new financing promises and changes in regulations have made M&As even more popular to create new market, maintain the existing market and acquiring unique technologies and intellectual properties. However, despite being considered as a pivotal business strategy to achieve target growth the general consensus is that more than eighty percent of the M&A fail to reach the desired financial goal (Nahavandi and Malekzadeh 1993) and fifty percent simply become unsuccessful (Cartwright and Cooper 1995; Child et al. 2001, Sally Riad. 2007).…

    • 1719 Words
    • 7 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    The Merger of Hewlett-Packard and Compaq: Strategy and Value
    • 2348 Words
    • 10 Pages

    The Merger of Hewlett-Packard and Compaq: Strategy and Value

    Many acquisitions and some large strategic investments are often justified with the argument that they will create synergy. In this paper, it is considered the pros and cons of synergy. Also there is an examination of how can be value the synergy of HP and Compaq and how sensitive this value is to different assumptions. Finally a conclusion with an empirical examination of how much synergy was actually created in this corporate merge, and how much was gained or lost.…

    • 2348 Words
    • 10 Pages
    Powerful Essays
    Read More
  • Best Essays

    M&A between GEELY HOLDINGS AND VOLVO CARS
    • 2615 Words
    • 9 Pages

    M&A between GEELY HOLDINGS AND VOLVO CARS

    EXECUTIVE SUMMARYOne of the most happening ways to expand and grow business in recent days is through Mergers or Acquisitions (M&A). It is the fastest way to grow in terms of market share/diversification and to enter new market that would not have been possible with any other choice of growing the business. This has been a frequently seen phenomenon in automobile industry ranging from Renault-Nissan Team up, Tata Motors-JLR merger to acquisition of Volvo by Geely. Strategic Mergers and Acquisitions focuses on the growth of the organization within the same industry or related/unrelated industry and affects the organization in terms of economies of scale, vertical integration (upstream or downstream) along the value chain of the industry, strong alliances and competitive advantage. One of the major motivations for M&A in automobile industry is to have the positive synergistic effect. This paper focuses on the study of this acquisition, because this is the first time in the automobile…

    • 2615 Words
    • 9 Pages
    Best Essays
    Read More
  • Powerful Essays

    Microsoft’s bid for Yahoo!
    • 1874 Words
    • 8 Pages

    Microsoft’s bid for Yahoo!

    1) Acquisition can create synergy which makes the combination of corporations more profitable and effective than individual one. Synergies include both search and non-search related advertising platform. The sharing of research and development resources would help lowering capital spending. New chemistry between talents from two companies would unleash new levels of innovation that neither one has this on their own.…

    • 1874 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    M&a in India in Past Few Years Using Hypothesis
    • 2460 Words
    • 10 Pages

    M&a in India in Past Few Years Using Hypothesis

    Abstract The process of mergers and acquisitions has gained substantial importance in today's corporate world. This process is extensively used for restructuring the business organizations. In India, the concept of mergers and acquisitions was initiated by the government bodies. Some well known financial organizations also took the necessary initiatives to restructure the corporate sector of India by adopting the mergers and acquisitions policies. The Indian economic reform since 1991 has opened up a whole lot of challenges both in the domestic and international spheres. The increased competition in the global market has prompted the Indian companies to go for mergers and acquisitions as an important strategic choice. The trends of mergers and acquisitions in India have changed over the years. The immediate effects of the mergers and acquisitions have also been diverse across the various sectors of the Indian economy. Till recent past, the incidence of Indian entrepreneurs acquiring foreign enterprises was not so common. The situation has undergone a sea change in the last couple of years. Acquisition of foreign companies by the Indian businesses has been the latest trend in the Indian corporate sector. The Indian IT and ITES sectors have already proved their potential in the global market. The other Indian sectors are also following the same trend. The increased participation of the Indian companies in the global corporate sector has further facilitated the merger and acquisition activities in India. The various factors that played their parts in facilitating the mergers and acquisitions in India are favorable government…

    • 2460 Words
    • 10 Pages
    Powerful Essays
    Read More

Related Topics