The Completions And Interests Of Mergers And Acquisitions ( M & A ) Is Growing Largely Day By Day

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The completions and interests in Mergers and Acquisitions (M&A) is growing largely day by day (Michael A. Hitt, Jeffrey S. Harrison, R. Duane Ireland, 2001) During the recent recessions companies are looking into different ways to stay afloat, to grow and even continue to exist, and one of the best ways of doing this, is to merge or acquire another company (Dash, A, 2010) Lynch (cited in David Faulkner, Satu Teerikangas, Richard J. Joseph, 2012) also believes in some instances growth can take place within sector integrations which includes horizontal or vertical or even by going into a new sector by acquiring a new business, which is called diversification. A Merger or Acquisition takes place when two or more companies join …show more content…

2010). This is one of the reasons why its become increasingly concentrated over the past two decades ( Kumar, 2012). During the period between 1980’s and 1990’s this industry saw a considerable rise in mergers and acquisitions, with the growth alone, of the industry, rising 959 percent in stock index (Kaplan, 2000). Coyle (2000) tells us that a Merger and Acquisition (M & A) takes place when two or more companies combine all or part of their operations. But there are some differences between them; Paul and Richter (2009, p.35) defines a merger as “ a full joining together of two previously separated corporations. A true merger in the legal sense occurs when both businesses fold their assets and liabilities into a newly created third entity resulting in a new corporation” the authors also define an acquisition as “a direct purchase or through a merger that involves the exchange of assets”. Most of the M & As created in this industry is through horizontal mergers (Neirinckx, 2000) with this being shown in the merger between Glaxo Wellcome and Smithkilne Beecham, to create GlaxoSmithKline (Kumar, 2012). This merger took place in the year 2000 (, 2014) with the deal costing $76 billion. After the merger occurred they held 7.3 percent of the global pharmaceutical market, with a combined value of £108billion ($177billion) (, 2000) . The terms of the deal was described as a “merger of equals”. Glaxo Wellcome will have control of 58.75

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