Concept check
Date: 2015-10-07; view: 602.
1.What possibilities to invest money are used by successful companies? Can you add your own ideas to this list?
2.Define a merger and give its general characteristics.
3.Give a definition of a takeover. What's the difference between mergers and takeovers?
4.What are conglomerates?Speak on their strong and weak points.
5.Which reasons for M&As result in adding shareholder value and which do not? Fill in the table below and comment on it.
| Add shareholder value | Do not add shareholder value |
| 1) economy of scale | 1) managers' hubris |
| … | … |
6.What disadvantages of M&As can be identified for the society and for integrated companies proper?
| Cons for the society | Cons for combined companies |
| 1) reduced competition | 1) dismissals of managers and personnel from the acquired company |
| … | … |
7.What are major types of business integration? Comment on specific features of each type.
8.Which company can be considered a multinational one? What are pros and cons of operating of a multinational company in a host country?
9.What are the main reasons for an acquiring company to purchase another one?
10.Speak on a friendly takeover. What is a takeover bid?
11.How can friendly and hostile takeovers be distinguished?
12.Disclose the difference between a raid and a takeover bid. Which is more beneficial for an acquirer? Why?
13.What are the tactics of a hostile takeover?
14.What are the forms of a reverse takeover?
15.Complete the following sentences which summarise the information about leveraged buyouts.
1) Leveraged buyouts are takeovers which imply … .
2) Raiders are particularly interested in buying … .
3) Selling off the assets of badly-managed or under-priced companies is … .
4) The process of LBO can go wrong in cases if … .
5) The idea of MBO is … .
16.How would you characterize the process of demerging? What are the reasons for it?
17.Decide if the statements are true or false.
1. A horizontal merger is referred to the combining of companies involved in different steps of production.
2. It is much easier to manage companies in unrelated industries.
3. A multinational company has branches mainly in developing countries.
4. Takeover acquisitions do not result in creating a new company.
5. The only reason to take a company over is its reasonable price.
6. A hostile takeover occurs when management of the target company is against it.
7. Asset-stripping is purchasing a majority of shares in another company.
8. Dawn raid is the acquisition of a public company by a private one.
9. Divestiture is a form of demerging when a combined company needs to raise more capital.
10. Hidden liabilities of a target company refer to a disadvantage of a takeover.
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