Suez Case

ir share of financial issues though their belief in growth by acquisition and diversification of products and market channels ensures their ongoing success in a volatile and evolving world market.

According to the researchers the increased value results from an opportunity to utilize a specialized resources which arises solely as a result of the merger (Jensens & Ruback, 1983; Bradle, Desai and Kim , 1983). For creating operational and financial synergies managers believe that two enterprises will be worth more if merged than if operates as two separate entities. Thus, the two companies, A and B:

If the merger had taken place as per the current EPS values only, i.e. at the Exchange ratios as given below:

However, a stock drop in the U.S. market is not historically unusual for impending mergers. So, all things considered, it looked like this might be a great combination.

The market responded favorably to the merger between Loblaw Companies Ltd and Shoppers Drug Mart. News of the agreement sent Shoppers shares to increase by approximately 27% on TSE before falling back to 13%, and Loblaws shares were up almost 9% (Globe and Mail, 2013). On the 15th of July 2013 the announcement was made public, and both companies shares price closed at an alltime high of $50.13 per share for Loblaws and $60.12 per share for Shoppers. During the rest of the same month, Shoppers shares price kept on risen, while Loblaws shares price maintained its usual price below the $50 standpoint (Appendix B).

On April 1, 1997, the merger with Atlantic Dairy Cooperatives was effective (Wilmes). It was a single discrete event. The merger was good news for the Land O’Lakes Inc. because the company became bigger which led to strong growth and expansion. Land O’Lakes Inc. celebrated this news and the Chief Executive Officer, Jack Gherty discussed about his bright vision for the future because “the merger will allow the company to provide greater long-term value and returns” to customers (Wilmes).

Merger motives that are questionable on economic grounds are diversification, purchase of assets below replacement cost, and control. Managers often state that diversification helps to stabilize a firm's earnings and reduces total risk, hence benefits shareholders. Stabilization of earnings is certainly beneficial to a firm's employees, suppliers, customers, and managers. However, if a stock investor is concerned about earnings variability, he or she can diversify more easily than the firm can. Why should Firm A and Firm B merge to stabilize earnings when stockholders can merely purchase both stocks and accomplish the same thing? Further, we know that well-diversified shareholders are more concerned with a stock's market risk than with its total risk, and higher earnings instability does not necessarily translate into higher market risk.

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

The physical and geopolitical obstacles involved in building a canal in a foreign nation are numerous and complex; however, a canal presents an excellent economic opportunity for imperialist nations. For this reason, a French canal was a political, economic, and imperialist idea that had historical roots back to the reign Louis XIV (Negrelli). Later Napoleon had a vision, reminiscent of Louis XIV, to overcome nature through French imperialist efforts, including a massive investment of both monetary and human capital to connect trade destinations.The isthmus between the Red and Mediterranean seas, the Isthmus of Suez was viewed as a opportune chunk of land to excavate for the purpose of a canal to cut the travel

Before the acquisition our company was strong in customer satisfaction but in business and like the world around us we must keep changing for improvement. With our full and happy client base we plan on a successful merge with RPZ. Their innovative ideas will provide our clients with exciting new marketing opportunities.

Theoretically, with the results of the P / E multiples, the company's value or performance can be determined by multiplying the company's profit with this ratio upon the target company. Phelps’s P/E multiples have increased from the previous quarter in which attract companies’ attention for acquisition. Higher P/E means PD use stock as consideration more frequently. In addition to positive EV/Sales, it shows that Phelps has more debt rather than cash. However, the growth of Phelps’ P/E targets a good prospect in future earnings. For ROE, as higher the return is better so, with this ROE, FCX can use it to compare the other companies.

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.

Through divestment Messier reduced the debt ratio, and consequently the company's leverage. He sold many of the nonessential businesses, but still maintaining a healthy diversity. Strategic alliances with wealthy and well established partners guaranteed a flow of capital for the rapid growing business of the conglomerate. Also, partnerships with other competitors, especially in the communications area, ensured the use of a larger infrastructure and the opportunity to provide services for more customers. Messier also restructured the company's remaining subsidiaries through parallel consolidations and mergers.

As we can see on attached charts - Market was not too sure about this merger (“On paper, the deal has much to commend it, many outsiders say”. But thorny issues remain, including how to accommodate the strains between consultants and auditors, potential conflicts of interest involving important clients and even the delicate matter of choosing a new name. If the negotiators are not careful, fallout could haunt the combined firm for years to come.) From the time when merger plans were made public Shares of

In 1993, merger talks finally broke down between Renault and Volvo. A merger between the two companies had seemed the inevitable consequence of a number of years of collaboration and the plans seemed well set.