文档介绍：Megers & Acquisitions
Three Areas of Study
1. Determining if a Merger creates value (then developing an offer price)
2. Evaluating M&A offers in the market place (your case analysis assignment)
3. M&A Strategies (biggest area of “talk”)
Megers & Acquisitions
Three Areas of Study
1. Determining if a Merger creates value (then developing an offer price)
2. Evaluating M&A offers in the market place (your case analysis assignment)
3. M&A Strategies (biggest area of “talk”)
Today - Cover both
Part 1 & 3 via lecture
Part 2 via example
1997 and 1998 Mergers
Sensible Reasons for Mergers
Economies of Scale
A larger firm may be able to reduce its per unit cost by using excess capacity or spreading fixed costs across more units.
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Reduces costs
Sensible Reasons for Mergers
Economies of Vertical Integration
Control over suppliers “may” reduce costs.
Over integration can cause the opposite effect.
Sensible Reasons for Mergers
Economies of Vertical Integration
Control over suppliers “may” reduce costs.
Over integration can cause the opposite effect.
Pre-integration (less efficient)
Company
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S
S
S
S
S
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Sensible Reasons for Mergers
Economies of Vertical Integration
Control over suppliers “may” reduce costs.
Over integration can cause the opposite effect.
Pre-integration (less efficient)
Company
S
S
S
S
S
S
S
Post-integration (more efficient)
Company
S
Sensible Reasons for Mergers
plementary Resources
Merging may results in each firm filling in the “missing pieces” of their firm with pieces from the other firm.
Firm A
Firm B
Sensible Reasons for Mergers
Mergers as a Use for Surplus Funds
If your firm is in a mature industry with few, if any, positive NPV projects available, acquisition may be the best use of your funds.