M&A- Textron Company

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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. ...