Motives and Effects of Mergers in Financial Decision Making

BUSM4308 Financial Decision Making for
Managers 2019-20

Table of contents
• Motives or purpose for mergers
• Funding sources used by firm in merger and its effect on capital structure
• Details regarding movement of share pre and post merger and the factors that might have caused company's share price to move
• Comparing share price of company within its sector and to FTSE in graphical and discussion manner
• Commenting on newly formed corporations financial performance
• Identifying winners and the losers in merger and explaining the ways to reach conclusions

Motives or purpose for mergers
The Royal Dutch and the shell group was been formed in the year 1907 and the merger took place in November
2004 at the time when merging of an interest of Royal Dutch and the Shell transport has taken place within which
each of the company retained its own identity.
Motives
Attaining leading position as an oil and gas company
Getting high economies of scale
Enhancement of customer base
Maximization of productivity and profitability

Funding sources used by firm in merger and its effect on capital structure
Funding sources that used in merger of Royal Dutch and the Shell transport enumerated below: