Merger : Merger Or Acquisition? A Wise Choice?

2066 Words Nov 30th, 2014 9 Pages
1. Evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition Ewas a wise choice. Justify your opinion.
Mergers and Acquistions ultimately represent change within an organization. No other event in business can be as stressful or difficult as a merger or acquisition. The term “Merger” describes two organizations merging into one company and the term acquisition refers to the acquisition of assets by one company from another company. Mergers can also be driven by basic business reasons, such as bargain purchase. It may be more cost effective to acquire another company then to invest internally.
Another example may be diversification. It may be necessary to smooth-out earnings and achieve more consistent long term growth and profitability. This is particularly true for companies in very mature industries where future growth is unlikely. It should be noted that traditional financial management does not always support diversification through mergers and acquisitions. It is widely held that investors are in the best position to diversify, not the management of companies since managing a steel company is not the same as running a software company.
Organizations who are able to acquire or merge with other companies are able to expand their ability to forge partnerships with other corporate leaders. They are often able to expand their services internationally to gain more profits and extend their brand. In this analysis of…

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