Merge and Acquisition

Mergers and Acquisitions (M&A) typically refers to a corporate fiscal and strategic set of strategies that deal with the purchasing, selling, and/or combining of different companies or pieces of companies that are able to help grow a company or experience rapid innovation with either creating another business entity or investing research and development from the ground up (Hennepopf, 2009). Modern organizations are so highly complex and competitive that the old paradigm improving efficiency and the bottom line improves, is no longer all it takes to be successful. Companies must continue to reinvent themselves, put Board egos aside and look at the marketplace, their expertise, and what they can do to retain market share. With technology changing so

Mergers and takeovers are forms of external growth within a business. External growth occurs when one firm decides to expand by joining together with another. A takeover specifically refers to the gaining control of a firm by acquiring a controlling interest in its shares (51%). Merger, on the other hand, means the joining with another firm to form a new combined enterprise, shares in each firm are exchanged for shares in the other.

Some of them were acquisitions whereas others were mergers of firms in order to earn market share and power to be able to set prices and quantities they sold which maximized their profits. As a consequence, this led to more than 100% increase in premiums consumers had to incur, whereas average income of the US population had only increased by 29% over eight years, AMA stated.

Mergers. Acquisitions. Mega-mergers. Recent years in healthcare have witnessed some of the biggest companies acquiring one another at alarming rates. However, the Wall Street Journal released an article at the end of October that has everyone talking - one of the largest owners of drugstores in the United States is considering buying one of the largest health insurers in the United States. That is right, CVS Health might be purchasing Aetna for approximately $66 billion.

In 2011, we acquired certain companies for an aggregate purchase price of $771 million. The primary reasons for these acquisitions, none of which was individually material to our consolidated financial statements, were to expand our customer base and sales channels, including our consumer channels and subscription entertainment services. Acquisition-related costs were expensed as incurred and were not significant.

Eat or be eaten: especially in markets with a lot of structural changes and diverging sizes of companies the question arises, whether one wants to make an acquisition or be acquired.

there are three sorts of mergers: horizontal mergers, vertical mergers and combined. A horizontal merger is an amalgamation between two firms possibly dynamic in similar market at similar level of activity e.g. between two insurance firms whnventory networkile a vertical merger includes firms working at various levels of chain of supply e.g. an insurance firm obtaining a

The probability to ignore failure can allow it to reoccur (smaller failure growing into bigger failure). Lack of understanding and resolving a small problem can lead to bigger losses in a timely manner; an example was Jill Barad, who presented refused to acknowledge a problem before the company was acquired. It was discovered that a loss of $105 million, rather than a profit of $50 million was recorded by the company, furthermore, another loss of $184 million was recorded for the preceding quarter but still she refused to take action, she continued to commit the same error for the subsequent two quarters. Another example is the Australian HIH insurance group, the company was the largest corporate failure in Australia. It was observed that the little small signs surfaced but the management decided to ignore them and conceal them from the board of directors, likewise the board of directors too did not see the warning signs and if they did, why did they refuse to remain flaccid [2].

lot of academic research shows that the odds of making an acquisition work are not high. Should companies just forget about M&A, and focus exclusively on innovation and organic growth?

lack of community and stockholder trust, loss of value, are all likely organizational outcomes of

Even though the fundamental objective for mergers and acquisitions is to create value, there may be factors involved that cause the value to be destroyed. It is believed that the prime component of why acquisitions fail is due to the fact that they paid too much to control it, which in turn leaves them with huge debts. The buyer may find that the premium they paid for the acquired company 's shares (the so-called "winner 's curse") wipes out any gains made from the acquisition (Henry 2002).

Oftentimes, M&As look like an easy way to improve a company’s portfolio and market position. Disney’s acquisition of Pixar is a compelling example of successful M&As. However, the dangers of such M&A agreements tend to be underestimated (Rein, 2009). The merger of AOL & Time Warner was disaster because of the lack in harmony and collaboration (DiMaggio, 2009). One of the biggest mistakes acquiring companies can fall into is taking the cultural differences of the acquired company for granted (Rein, 2009).

Merger: It is the blending of two companies to form a new company where the identity of one of the firms will be lost.

The Baker & McKenzie report predicts the technology sector to drive M&A deals. According to their data, the sector’s deals could reach $415 billion by next year, which would be the highest level since 2000. Michael J. Grossman from RSM US LLP has also pointed out to the strength in the technology sector’s growth – especially in terms of cross-sector deals. Fintech and technology in the automotive sector have had a strong year.

Pitching an M&A deal to shareholders is much easier for companies than organic growth, which not only increase operating costs, but also requires more time and resources to result in profitability. 2007 was the record year for M&A deals with an estimate volume of $4.2 trillion until this record was beaten last year. 2015 became the biggest year on record for M&A with an estimated $5 trillion in deals, which is more than the GDP of Australia, Mexico and India combined. Major deals were struck across a wide range of industries, most notably in technology, telecommunications and healthcare. This report discusses what is driving this aggressive growth by companies through M&A, a highlight 2015’s biggest deal and predicts what M&A