How Mergers Affect The Economic And Financial Power Of Smaller Firms

With reference to your own research and the item above, do you think that takeovers and mergers inevitably improve the performance of the businesses involved?

Becoming a larger more efficient company with a strengthening competitive position opens up the opportunity for more mergers and acquisitions of competitors, suppliers and/or customers.

Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.

It becomes very obvious the geographical location also play a significant role in the merger process, which was not a factor in the Ole-Jacob article. When two colleges are not geographically located such as mentioned above a much larger problem exists. Research says “Rutgers-Camden is located in North Jersey; Rowan University is located in South Jersey. The campuses are roughly half an hour apart by car (assuming no traffic delays) or between 45 minutes to almost an hour apart by bus”. This illustrates that simply getting students, staff and faculty to and fro between campuses of one merged university can become an issue that those considering non-contiguous geographic mergers will have to face (Elliot & Major, 2001).

1.      Economies of scale. An amalgamation company will have more reasons at its command that the individual companies. This will help in increasing the scale of operations and the economies of large scale will be available. These economies will occur because of more intensive utilization of production facilities, distribution network, research and development facilities, etc. these economies will be available in horizontal mergers were scope of more intensive use of resources is greater.

A strength from performing a merger is the ability to acquire a company’s unused debt. “Some firms simply do not exhaust their debt capacity. If a firm with unused debt capacity is acquired, the new management can then increase debt financing, and reap the tax benefits associated with the increased leverage” (Keown, 2005, pp. 23-4). Another strength is enabling Baderman Island to remove an ineffective management strategy or team. Baderman Island has the option to decide who stays with the merged company, and who is out the door. Often times, a weak management leading team is the problem the organization has not evaluated for its mediocre success. “The merger of two firms can result in an increase in market or monopoly power. Although this can result in increased wealth, it may also be illegal. The Clayton Act, as amended by the Celler-Kefauver Amendment of 1950, makes any merger illegal that results in a monopoly or substantially reduces competition. The Justice Department and the Federal Trade Commission monitor all mergers to ensure that they do not result in a reduction of competition” (Keown, 2005, pp. 23-4).

The goals of mergers range from reducing the number of competitors, to access of new products (Belcourt et al., p 330). Statistics show that 80% of new product developments fail (Howells, 2011), partly due to challenges and conflicts with human resources functions. Mergers and acquisitions are the fastest way to enter new markets. “It is estimated that 1/3 of all mergers fail due to faulty integration of diverse operations and cultures,” (Chhinzer, 2013). Therefore, the success of a merger or acquisition lies in the ability to guide, motivate, retain, and effectively use

As a result of extensive research on various topics, the one area there has been on the rise and is subject to further debate and analysis is the North American free trade agreement. This particular treaty is of interest owing to the current globalization that is fast consuming economies across the world as well as the change in leadership in the three countries involved. As a result, this essay takes into account the current economic state of the world about the increased competition; need to form economic mergers and the role it plays. Therefore, the choice of this key term is as a result of curiosity of the effect of globalization on the formation of economic mergers.

1) Describe the new business practices that led to business consolidation and monopolies. How did government policies address these new business practices? (520-528)

Mergers and other affiliations have different reasons for consolidation of positions and reducing the number of company employee's. There are businesses that want to merge in efforts to acquire, expand, improve, or even take over an industry to make a profit or cut cost in their organization. Consolidation of companies in the healthcare industry due to economic pressure can lead to reduction of jobs (Fallon & McConnell, n.d.). When mergers of the same industry combine it can become burdensome to retain all employee's from both companies and still make a profit. As a result, the merger may offer incentives such as voluntary termination incentive, relocation, or early retirement (Fallon & McConnell, n.d.).

Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.

New companies entering the market, mergers, and globalization, on pricing and the sustainability of profits: Identify the type of merger activity in your

What is a merger? Most people would think that it is some sort of combination of two or more companies to be one. A simple synonym describing this noun would be a: combination, fusion, integration, confederacy or even an incorporation. Common small business approach of a merger is to make all work efficient and at a reduced cost to promote new products and services within another venture doing roughly the same ratio of productivity. Within the mergers concept, there is often a term used as discounted cash flow (DCF). This logic is strictly for assessment of the companies. There are both advantages and disadvantages for DCF. The advantages of this model allow for changes in cash flows in the future. Cash flows are estimated based on their value

Is bigger really better? Big might be sometimes better, but companies, corporations and monopolies can get too big. “Some merged companies become so huge that they lose focus, gain overhead and increase their expenses

More explicitly, the importance given to efficiencies as a defence to otherwise problematic mergers, the creation of the office of the chief economist, the guidelines regarding horizontal mergers, and more importantly the introduction of the new ’significant impediment of effective competition test’ (SIEC) are the main indicators of the shift in merger policy.