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M&A- Textron Company

Think about the Textron Company and the possibility of it merging with Boeing Company. Write a two to three page paper answering the following questions:

1) If you were to pick one company (Boeing) for your SLP company (Textron) to merge with. Explain your choice with respect to possible benefits of this merger and why you would choose this company over any other choice for a potential.

2) How would you finance a takeover of this chosen corporation? Please explain your reasoning.

3) What would your second and third choices be for a merger with your SLP company (one being Bridge Loan Financial)? Again, explain your reasoning for wanting to merge with these companies, and why they would be second or third choices rather than your first choice.

4) What specifically are the financials?

5) How would you finance the acquisition?

6) How much would each option cost? What are the D/E ratios of the companies and how would the merger affect the balance sheets for the combined company?

Remember to make use of the background materials in your analysis as well as additional research. Please reference all of your main sources of information, and use multiple references in your analysis.

7) What do you perceive you have learned in Module 5 SLP? Which of the following learning objectives do you feel you have mastered?

☼Explain and discuss financing options for financing mergers and acquisitions

☼Identify success factors in mergers and acquisitions
Please provide your evaluation of the Module 5 SLP in brief.

NOTE: Please note that your report/assignment will not be accepted without proper citations and references. You must use the sources from the background material together with the sources you find your own. It is also REQUIRED that you answer all the questions related to learning outcomes.

Solution Preview

1) If you were to pick one company (Boeing) for your SLP company (Textron) to merge with. Explain your choice with respect to possible benefits of this merger and why you would choose this company over any other choice for a potential.

Boeing would be a good company for Textron to merge with because both companies primarily operate in the aircraft manufacturing and defense product space and thus, the combined strength of the two companies can result in significant growth of the merged entity in this industry. Boeing is one of the largest companies in the world for aircraft and defense products and thus, is a preferred choice for merger because the merger would produce numerous synergies based on the combined manufacturing capabilities, experience and infrastructure of these two companies in the aircraft and defense sector. The individual capabilities of both the players will complement each other and the merged entity will be able to dominate the global aircraft and defense industry in a much more effective manner.

However, it is to be noted that Boeing is a much larger company as compared to Textron in terms of revenues and employee base. Hence, it would be a big challenge for Textron to merge with such a large company. Textron's corporate culture and working practices would diminish by merging with such a large organization.

2) How would you finance a takeover of this chosen corporation? Please explain your reasoning.

Boeing is much larger in size as compared to Textron. Hence, it is difficult for Textron to finance such a large takeover with internal accruals only. Hence, the company would finance this takeover by raising both debt and equity capital. The company can raise equity for financing this takeover from large private equity firms as such firms would not only bring the requisite capital, but also the managerial capabilities to support such an acquisition. ...

Solution Summary

Discusses a merger scenario related to an organization in aircraft and defense industry.

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