Mergers And Acquisitions Essay

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Introduction Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions. Mergers and Acquisitions According to Florida Incorporation, a merger is the…show more content…
Cash advance may be safer for the buyer, but getting the company at the other end to agree may be difficult, and the company might lose the sale. An Irrevocable Letter of Credit is a good option for both parties because it is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount (Week 5, 2006). According to the week five lecture, the U.S. organization should select a major bank that has considerable experience with irrevocable letters of credit. The major bank handling the Irrevocable Letter of Credit can advise the least risky method of handling the transaction. The general idea is that funds are transferred from the foreign customer's trusted financial institution to the organization's bank once the terms of the letter of credit are met. An Irrevocable Letter of Credit is one financial instrument that can help organizations make sales to a foreign entity safely. A few decades ago, some U.S. companies began to explore another takeover solution, namely partial or total acquisition of independent non-U.S. companies (Week 5, 2006). In this day, there are a significant percentage of merger and acquisition transactions, which are cross-border. Even in combinations of two U.S. multinationals, the percentage of international business being incorporated can be a considerable economic portion of the total (Week 5, 2006). Often, when specific patents, products, management teams,

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