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mergers and acquisitions for related issues

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Explain your views on mergers and acquisitions (M&As). Examine the related issues and implications both from the perspective of managers and investors. Make sure your responses are well organized and documented, using references from any of the assigned readings on the topic for this class.

Assigned readings:
Shefrin: Shefrin, H. (2007). Behavioral corporate finance (1st ed.). Montier: Montier, J. (2006). Behavioural Finance: Insights into irrational minds and markets.

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Explain your views, on mergers and acquisitions (M&As). Examine the related issues and implications both from the perspective of managers and investors. Make sure your responses are well organized and documented, using references from any of the assigned readings on the topic for this class

From the perspective of managers, mergers present opportunities, the merged company has increased sales. Since the pay packages of managers are related to the revenues of the company, the manager has the opportunity of having a higher pay package. In addition, the managers have the opportunity of managing a company with a larger workforce. This improves the work record of managers and helps them move to higher positions later in their careers. From the perspective of managers to purchase assets would be a difficult task, however, this task is accomplished through an acquisition (2). Further, through acquisition and mergers large monopolies develop. Along with the size of the company, the importance and pay packages of managers increase very fast. When the company is large it is easier to enter into strategic alliances. From the perspective of managers, large companies mean opportunities for erecting barriers to entry. Marketing managers are in favor of mergers and acquisitions because it helps the company expands when the present market seems saturated. The managers feel the new company has a fresh direction and so is likely to grow more. The managers may feel that his is an ...

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