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Mergers and acquisitions

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I need to write a 1,000 word paper in which I pick five types of M&Aâ??s, such as horizontal, vertical, congeneric, conglomerate, spin-off, divestiture, or carve-out, etc. For each M&A type that you choose provide the following:

â?¢ Define and explain how each of your chosen M&A types works. What is it intended to accomplish?

â?¢ For each M&A type you have selected, provide an example of an actual M&A that occurred. Briefly discuss the M&A.

Examine the following issues related to M&As:

o What are predominant issues driving a companyâ??s interest in pursuing M&A activities?
o How prevalent have M&As been? What are recent trends?
o Provide some descriptive statistics about M&As generally. Pick a time-frame and see how many M&As have occurred. As a whole, were they successful? Was value created or destroyed?
o Discuss any other issues you feel are of relevance to motivate the topic of M&As.

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Mergers and acquisitions

I need to write a 1,000 word paper in which I pick five types of M&Aâ??s, such as horizontal, vertical, congeneric, conglomerate, spin-off, divestiture, or carve-out, etc. For each M&A type that you choose provide the following:

â?¢ Define and explain how each of your chosen M&A types works. What is it intended to accomplish?
Vertical merger is between two firms making different goods and services for a specific finished product. In other words, it is an acquisition of the supplier with the firm or the merger of a firm making finished product with its supplier.
This form of integration is supposed to achieve cost reduction especially transportation costs. In addition, it has the purpose of improving supply chain coordination, getting access to downstream distribution channels or even erect barriers to entry (2).

Horizontal M&A occurs when firms selling the same products merger. This means that companies that are competing in the same markets merge or join together.
This integration is designed to achieve growth. Horizontal integration is intended to accomplish a higher level of market power. In other words it means reduction in the cost of international trade, greater bargaining power with suppliers and channels of distribution. further, these firm intend to achieve economies of scale.

Conglomerate merger is done between firms that are involved in unrelated business activities. These firms intend to accomplish protection against overspecialization, greater use of management talent, and overall reduction in costs. Conglomerate mergers are undertaken to avoid the provisions of anti-trust laws and still grow(1).

Divestiture is the release of assets. The purpose of the divestment is usually to gain financial resources. There are other reasons for divestiture like a government ruling or because of anti-trust laws. It is a sale of assets of a firm. The companies typically achieve financial gains or gain competitive advantage by concentrating on its core business (2).

Spin-off means there is a creation of a independent company through the sale or distribution of new shares of an existing business of a parent company. The spin-off seeks to accomplish a high level of ...

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See Also This Related BrainMass Solution

Accounting, tax and legal factors affect an M&A strategy

How does the following effect mergers and acquisitions
o Accounting: Revenue enhancement, cost reduction, and risk management
o Taxes: Shields, synergies, and the weighted average cost of capital
o Legal: Corporate organization and ownership, litigation risk, and legal compliance

Select at least two effects from each category and explain their relevance in pursuing an M&A strategy.

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