Concept of Merger and Acquisition : Report

Added on - 06 Jun 2020

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International FinancialManagement
Table of ContentsINTRODUCTION...........................................................................................................................1MERGER AND AQUISITION.......................................................................................................1INTERNATIONAL HARMONISATION IN MERGERS AND ACQUISITION.........................4ORGANIZATION STRUCTURE AND EMPLOYEE................................................................5TAXATION.....................................................................................................................................5ACCOUNTING AND FUNDING..................................................................................................6CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7
INTRODUCTIONThe concept of Merger and Acquisition has been defined as consolidation of businessorganizations. The term merger stands for when two or more companies are combine togetherand able to share their profit as well (Calvani and Alderman, 2010). In case of acquisition, onefinancially strong company purchase financially strong company. Through which purchaser firmhold ultimate control over another firm.MERGER AND AQUISITIONMerger is the deal among two or more existing firms which becomes one newcompany. After that it incorporate as a name of new firm. This merger can be done toexpand activities of firm in international market (Changqi and Ningling, 2010). Through thiscompanies are able to attain their target and maintain performance as well. There are varioustypes of merger mentioned rule which are as follows-Horizontal- It is concept of merger, in which both companies are of same industry areagree to share their profit and combined together as part of consolidation.Market extension- In this process firm are deal in same goods and services but theycompete in several market. Companies at different location combine their business together andopen new business with new name.Product expansion- Two companies combine together their goods as well as services andtry to attain success (5 Types of Company Mergers. 2017).Vertical- In this type of merger two firms engaged in business of produce finished goodstogether.In case of acquisition also two companies combine together and form new business. Inthis concept, one financially strong company purchase financially weak firm. After thatpurchaser company hold or enjoy ultimate control over that firm. In this case target companiesceases to exist according to legal proceedings as well as become a part of purchaser firm. In thisprocess target organization transfer all its assets (Cooper and Finkelstein, 2014). The termacquisition occurs when purchasing company owned more than 50 % ownership in target firm.Effective decision has been taken by members of acquirer regarding newly acquired assets inorder to maintain performance. It can be paid in case or in form of share or both. Higherauthority of both firms are mutually decide amount of acquisition and mode of payment as well.1
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