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Reasons for acquisitions in technology, telecommunications

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Why do you think there have been so many acquisitions in the technology sector, the telecommunications sector and the regional banking sector? In the future, do you see any sectors that might be getting a big pickup in acquisitions? Why?

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First there are some general reasons why acquisitions occur in most any industry:

1. It is an effective method to eliminate the competition.
2. It can be a relatively cheap way to acquire information, technology, systems, assets or employees.
3. Post acquisition can be a way to consolidate costs, spread the overhead and enhance profits.

Why do you think there have been so many acquisitions in the technology sector, the telecommunications sector and the regional banking sector?

For the technology sector, the reasons could relate to the time and cost it takes to develop the specific technologies to keep up with the competition in a fast moving marketplace. Even hiring the talent to develop the technologies takes time and effort.

Google, for example, was conducting seminars for students at colleges many years ago. They were looking for talented people with potential. They also used intern programs very ...

Solution Summary

The 589 word solution explores reasons for acquisitions in general and then in specific industries. The solution contains numerous examples.

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Rumors about potential mergers are often a hot topic in the business press. One rumor being floated around recently is a potential merger between mobile phone giants T-Mobile and Sprint. Mergers between two large companies are always complicated, but some have noted the possible synergies in 4G technologies that might be possible in such a merger.

As you know from reading the material in the background materials, mergers can bring about great rewards but also can bring great risks and pitfalls. For this assignment, do some research concerning the arguments both for and against such a merger from a financial perspective. For this module we are not so concerned with how consumers may fair, as this is an issue for the government to consider if they have to approve this merger. Instead you are considering this from the point of view of whether or not such a merger would be a profitable undertaking that would add value to the shareholders of both corporations.

There are may different articles on this potential merger, but here is one link to get you started:


But do not limit yourself to this article. Use Proquest, EbscoWeb, and other sources in the Cyberlibrary. Use various internet search engines such as news.google.com for the latest news on this merger. Look at the webpages for Yahoo and Microsoft. Then write a five page paper answering the following question:

Do you think a merger between Sprint and T-Mobile would add value to the shareholders of both corporations?

In your answer to this primary question, consider the following issues:

1. The impact on T-Mobile shareholders

2. The impact on Sprint shareholders

3. The financial condition of both corporations

4. Why might T-Mobile and Sprint combined as one company be more profitable than they would if they remain independent?

5. Potential pitfalls - might the combined entity actually be less profitable than either company operating independently?

In addition to making use of concepts from the background materials for this module, feel free to use concepts from Modules 1-4 as well.

798 words

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