Strategic Rationale For The Acquisition Of Myer Holdings Limited

933 WordsMay 1, 20164 Pages
1 Strategic rationale for the acquisition of Myer Holdings Limited 1.1 Growth motive The main reason for this Mergers & Acquisitions(M&A) activity is the growing scale of Premier Investments Limited (Premier). The target for acquisition is Myer Holdings Limited(Myer). Myer is an important customer for Premier with significant common interest. And the competitor, Woolworths South Africa(Woolworths) has already achieved the David Jones acquisition. Therefore, Premier choose Myer as the target for acquisition. 1.1.1 Growing scale and Geographic the acquisition of Myer will greatly help Premier expand its retails into some new geographic regions and acquire more capabilities faster with lower risk than developing them internally. M&A activity does help Premier get benefits on location from industry consolidation and acquire the control over supplier. 1.1.2 Competitive position For both Myer and Premier, the M&A is an appropriate way to satisfy the higher return for their shareholders and enhance their economic strength. In addition, Premier will enhance its rate of innovation through acquiring new technology and intellectual property. Also, Premier can diversify the company’s products into some new market segments and attract new customers and partners. Also, this M&A activity can improve the market competitiveness of Premier against other strong competitors in Australian market and such as Woolworths. 1.2 Synergy The acquisition of Myer has the robust view on synergy for

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