Mergers & Acquisitions
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Mergers & Acquisitions are new & quite confusing to me. I have to write a 1100 word essay which I analyze the effects of the following on M&A activities:
a. Accounting (i.e. revenue enhancement, cost reduction, risk management)
b. Taxes (i.e. shields, synergies, WACC)
c. Legal (i.e. corporate organization and ownership, litigation risk, law compliance)
d. Select at least two effects from each category and explain it's relevance in pursuing an M&A strategy.
Please be sure to include an introduction, conclusion, and cite references.
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Solution Summary
A M&A transaction results in significant impact on a wide range of areas, ranging from strategy and operations to compliance and financial reporting.
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Introduction: A M&A transaction results in significant impact on a wide range of areas, ranging from strategy and operations to compliance and financial reporting. Therefore, it is essential to understand the impact of such transaction on each of these aspects in advance to ensure that the resulting merger or acquisition is a successful one. A comprehensive knowledge and information about each of these aspects is essential to evaluate the true worth or benefit of a M&A transaction.
A M&A transaction has the potential to impact each and every operational area of the organization as organizations with distinct corporate culture, systems, process, employees and vision merge together or work together with a combined strategic approach. In this assignment, we will evaluate some of these areas that get affected due to merger or acquisition.
a. Accounting (i.e. revenue enhancement, cost reduction, risk management)
Revenue Enhancement: One of the major attraction for M&A is revenue enhancement of the merged entity or acquiring entity. Revenue enhancement occurs as market share of two different entities are combined, resulting in expansion of product/service offerings, target market and geographical reach. Further, due to synergies obtained via merger or acquisition, significant revenue growth is achieved as whole is always greater than sum of the individual parts. Therefore, the revenue of the resulting merged entity due to merger or combined business due to acquisition is much greater than the sum of the standalone entities prior to the acquisition. ...
Education
- BComm, University of Delhi
- Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
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