Mergers and Acquisitions (M & A) Mergers and acquisitions (M&A) is an important area of corporate

In today 's overall business environment, associations may need to create to survive, and one of the perfect ways to deal with creating is by focalizing with another association or obtaining distinctive associations. At the point when all is said in done, acquisitions can be level, vertical, or total. A notwithstanding getting happens between two firms in a comparable line of business. For example, one mechanical assembly and kick the container association may purchase another. On the other hand, a vertical merger includes becoming forward or in switch in the chain of spread, around the wellspring of unrefined materials or toward a conclusive buy. For example, a vehicle parts creator may purchase a retail car parts

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.

In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method of accounting for business combinations followed by limited coverage of the purchase method and pooling of interests provided in a separate sections.

Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (1) tax considerations, (2) diversification, (3)

1. Horizontal Mergers: Horizontal mergers happen when a company merges or takes over another company that offers the same or similar product lines and services to the final consumers, which means that it is in the same industry and at the same stage of production. Companies, in this case, are usually direct competitors. For example, if a company producing cell phones merges with another company in the industry that produces cell phones, this would be termed as horizontal merger. The benefit of this kind of merger is that it eliminates competition, which helps the company to increase its market share, revenues and profits.

Horizontal mergers take place between companies in the same industry. These companies are rivals who sell the same goods or services. When a merger takes place, a rival is eliminated and potential for gains become higher. A vertical merger is one in which a firm or company combines with a supplier or distributor. For example, if a car making firm is receiving chassis from two suppliers and decides to acquire them, it is a vertical merger. On the other hand conglomerate mergers are those between firms that

A merger is basically a deal that unites two existing companies into one company. This is usually done to expand a company’s reach, expansion into new segments or simply to gain market share. There are different types of mergers that exist as a result of the different reasons that companies might have to merge. The 5 main types include:

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 managers of the merged firms may not be familiar with running, for instance, a market outlet. The two firms may also have been of different sizes and this may require some adjustment or the buying in of some supplies from other firms or the selling of supplies to other firms. 3. Conglomerate

It involves two companies that produces same goods or services but at different stages of production. This type of merger helps increase the market power. A car wheels companies getting merged with Car Company is an example of Vertical Mergers. Companies are in the same line of

A horizontal merger is a merger between companies which operate in the same business field and they share the same product lines as well as markets. The obvious result of this deal is the expansion in market share, reduction in fixed costs and increase the efficiency of distribution channel and logistics. Usually, horizontal mergers are common in the industries where competition is intensive and the potential gains of market share are

Mergers and acquisitions can be classified in terms of the direction of the growth. A horizontal merger/takeover is the combining of two firms in the same stage of production, for example Well come Pharmaceuticals merged with Glaxo Pharmaceuticals. This sort of integration takes place to combat competition from the market and secure market domination; to reduce risks and increase financial strength; and to compete in

Diversification: some companies merge to sharpen focus with companies which have deeper market penetration in a key area of operation.

Eliminating competition: Merging allows companies to eliminate a future competition and gain a larger market share in their products market

In merger: The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stocks. Two companies become one, decison is mutual. They are not idependent anymore