...Case Study #1 The Merger of Two Competing Hospitals 1. What specific steps should the board take to create an executive team to manage the newly organization? Appointing a management team that can rightfully represent both institutions needs to be the primary concern of the board in creating a new executive team. It will be important to keep in mind that upper management within Banner Regional Medical Center (BRMC) had recently changed due to the exit of several key members; the new representation should reflect this change. The consolidation agreement should be closely adhered to because it stands as a written and physical agreement between the two hospitals. Close attention to the ramifications within the agreement will be symbolic to the upper management of both parties because it will show the intentions of the new board to integrate the agendas of each. Pat Herman, The previous CEO of Porter Regional Medical Center (PRMC) and the new group of 15 board members should create a time line that will allow for the structure of the consolidated hospital to be established. Interim managers should be appointed in the duration of the time line. This time line will test the management structure and should allow 2-4 years for job descriptions and managerial roles to be identified. The respective staff of each institution should be informed of the time line as well as the outlined details of the strategic merger plan. Because the merger will affect all employees, lower level...
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...MERGERS AND ACQUISITIONS TABLE OF CONTENTS |TITLE |PAGE NUMBER | |ABSTRACT |3 | |INTRODUCTION |4 | |THE ACCOUNTING METHODS |7 | | VALUATION |8 | | TYPES OF MERGERS |9 | |WHY MERGERS |12 | |STATUTORY REGULATIONS |13 | |COMPARISON OF MERGERS IN INDIA AND CHINA |16 | |ARCELLOR MITTAL DEAL |17 | |DAIMLER CHRYSLER DEAL |19 ...
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...Introduction Merger and acquisition both are strategic decision and an aspect of corporate strategy. One plus one makes three: this equation is the special alchemy of a merger or an acquisition. The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies - at least, that's the reasoning behind merger and acquisition. Most histories of merger and acquisition begin in the late 19th U.S. However, mergers coincide historically with the existence of companies. In 1708, for example, the East India Company merged with an erstwhile competitor to restore its monopoly over Indian trade. In 1784, the Italian Monte dei Paschi and Monte Pio banks were united as the Monti Reuniti. In 1821, the Hudson's Bay Company merged with the rival North West Company. Merger The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Basically, when two companies become one. This decision is usually mutual between both firms. A merger can happen when two companies decide to combine into one entity. According to Webster’s Business Dictionary- “A blending of two or more companies by acquisition, in which one company purchases others and they are absorbed into the parent company, or by consolidation, in which a new corporation is formed to absorb the merging...
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...the challenges faced by organization during mergers and acquisitions. It explains the challenges of merging the HR processes of the two organizations and suggests implementation strategies to prevent risks and delays. Mergers and acquisitions are preferred by companies in an increasingly competitive environment to acquire economies of scale and critical mass. Mergers and acquisitions result in complete change in the way the business is running and there are no other events in any organization which can be more difficult and challenging. According to Jensen & Ruback (1983) mergers and acquisitions benefit companies as it provides synergy, tax saving, shareholder wealth maximization and signaling. Draper & Paudyal (2008) state mergers and acquisitions have been beneficial to economies as the production achieves higher efficiency and has improved output. The economies achieved the ability to have improved bargaining power with the supplier and customer due to mergers and acquisitions. Mergers provide the companies to get tax savings. Mergers and Acquisitions According to Elebourne & Rambarran (2004), the process of merger refers to the process where one company is merged with another, and acquisition refers to the process when the company acquires another company. The merger process can be horizontal, vertical or conglomerate. As per Stigler (1950), horizontal mergers are achieved by merging the products and services. Horizontal merger is used in the way that the share of the company...
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...Merger of Equals Section 2 Yang LIU Student No. 5363940 Xiaoyi YAN Student No. 5363999 Yiding ZHAO Student No. 5516778 Zhuyun FANG Student No. 5484118 5P60 – Accounting Theory Professor Fayez A. Elayan Due Date: April 11, 2014 I. Background During the last decades, the merger and acquisition happened in the constantly developing economy, primarily deriving from the United States. Since the financial crisis happened in 2008, most companies in the world faced risks and losses; however they also had challenges and opportunities. Meanwhile merger and acquisition gave them the opportunity to get rid of the risks and losses that in turn allowed them to redevelop. Merger of equals became a new mode of merger and acquisition in recent years, which plays a significant role in the current global market. It is known that, merger of equals have been on the rise in order allow for sustainable and fast development. There are many reasons why companies’ merge and some examples could be illustrated to prove the points of views. The purpose of the merger of equals is to keep equality amongst the companies. Specifying the expectations of the merger is often a large part of the merging process. Since the trend of merger of equals is more and more popular, we wonder why merger of equals becomes so important in our daily. Unfortunately, there are few research about merger and equals, especially the influence on earning quality. Through all the...
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...Chapter 1 Course 7: Mergers & Acquisitions (Part 1) Prepared by: Matt H. Evans, CPA, CMA, CFM Basic Concepts Mergers and acquisitions represent the ultimate in change for a business. No other event is more difficult, challenging, or chaotic as a merger and acquisition. It is imperative that everyone involved in the process has a clear understanding of how the process works. Hopefully this short course will provide you with a better appreciation of what is involved. You might be asking yourself, why do I need to learn the merger and acquisition (M & A) process? Well for starters, mergers and acquisitions are now a normal way of life within the business world. In today's global, competitive environment, mergers are sometimes the only means for long-term survival. In other cases, such as Cisco Systems, mergers are a strategic component for generating long-term growth. Additionally, many entrepreneurs no longer build companies for the long-term; they build companies for the short-term, hoping to sell the company for huge profits. In her book The Art of Merger and Acquisition Integration, Alexandra Reed Lajoux puts it best: Virtually every major company in the United States today has experienced a major acquisition at some point in history. And at any given time, thousands of these companies are adjusting to post-merger reality. For example, so far in the decade of the 1990's (through June 1997), 96,020 companies have come under new ownership worldwide in deals worth a...
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...Mergers and Joint Ventures ECO/365 Microeconomics May, 8 2015 Mergers and Joint Ventures As a team, we learned about the different types of mergers and the differences between them. We also discussed how they differ from a joint venture. Different types of mergers We will start with the first type of mergers, which is Horizontal Merger. In a Horizontal Merger, pair of companies in the same industry that sell the same stuff or services combine their businesses together. This is the most common type of merger and is usually tends to occur in industries that are not very competitive. By combining businesses, they are able to save money in certain areas like double advertisement cost. The next type of merger is Vertical Merger. In a Vertical Merger, again, a pair of companies combines businesses but the difference from a Horizontal Merger is that these companies sell and make different products or services but each one contributes to a single final product. These types of mergers usually occur in assembly line type businesses like automotive for example. When the companies merge together to produce a final product they can find ways to help cut production cost and sometimes even material costs. Now we will talk about a Conglomerate Merger, this is when two or more company’s combine, and these companies are involved in totally unrelated types of business activity. Although, there are two different types of Conglomerate Mergers and they...
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...Firstly the benchmark for a failed merger must be set. The one most commonly used it whether the share price of the firm rose in comparison to an industry specific average, or whether it fell. However tis only considers the financial success of the deal, and neglects its strategic and social impact. The merger may have met the majority of its objectives (e.g. A reduction in real cost, improved position within the industry for future growth), but there was no increase in shareholder wealth, maybe because the assets were overpriced. Indeed in the first few years after a merger or acquisition out-performing the other, more established, firms in the industry can be difficult. Currently almost all studies dealing with the failure and success of mergers have focussed on the shareholder value in the short term. REF. Indeed the few studies that have analysed the long term implications propose that if the mergers are well selected and well planned the business capability of the brand can be increased. Maybe instead of considering the financial failure of a takeover, the societal success should be looked into. If the merger reduces the resources needed increases the range of products available and offers better quality products, the in terms of the consumer is this not a success? There are, broadly speaking, two main areas which can cause a merger to fail. The first is improper managing and strategy, and the second is cultural differences between the two firms. If both are will though out...
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...CURRENT ISSUES SERIES Mergers & Acquisitions: Organizational Culture & HR Issues Deborah A. Pikula IRC Press Industrial Relations Centre Queen’s University Kingston, ON K7L 3N6 Tel: (613) 533-6709 Fax: (613) 533-6812 E-mail: ircpress@post.queensu.ca Visit our Website at: http://qsilver.queensu.ca/irl/qsirc/ Queen’s University ISBN: 0-88886-516-3 © 1999, Industrial Relations Centre Printed and bound in Canada Industrial Relations Centre Queen’s University Kingston, Ontario Canada K7L 3N6 Publications’ Orders: 613 533-6709 Canadian Cataloguing in Publication Data Pikula, Deborah A. Mergers & acquisitions : organizational culture & HR issues (Current issues series) Includes bibliographical references. ISBN 0-88886-516-3 1. Personnel management. 2. Corporate culture. 3. Organizational change. 4. Consolidation and merger of corporations. I. Title. II. Series: Current issues series (Kingston, Ont.). HF5549.P469 1999 658.3 C99-932294-X Executive Summary Mergers and acquisitions are increasing in North America as organizations try to expand their operations and increase their competitive advantage. But despite optimistic expectations, mergers and acquisitions frequently fail, in part because managers neglect human resource issues, which are rarely considered until serious problems arise. This study highlights the importance of proactive management of human resource issues, concurrently with financial issues, and offers detailed practical advice to help ensure...
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...Ethical and Legal Issues Merger of Company A & Company B Human Resources Management & Talent Development 07-04-13 Abstract In any merger, there are always legal and ethical issues involved. These issues have to be resolved in order to ensure a successful merger. It is the role of Human Resource personnel to ensure the code of ethics is used in legal and moral implications. The role of the Human resource manager is to create an ethical environment in which all employees are able to enjoy there inalienable rights. These rights will include the accessibility of information about the job, company, and there career and the right not to be coerced into situations. Maintaining these rights will help in reducing stress, establishing trust, increasing productivity and efficiency. This report will document the legal and ethical issues associated with a merger. It will also consist of a detailed implementation plan in resolving these potential ethical and legal issues. A plan for establishing an ethical work environment and resolving ethical and legal issues will be discussed as well. Identify Specific Legal and Ethical Issues involved in Mergers Recently the mergers and acquisitions of firms has become a major trend in business. In the process of mergers and acquisitions, the role of ethics and compliance has become a major step in ensuring success. A breakout session was held just recently on ethics and compliance in mergers and acquisitions. The panel, which featured...
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...Merger Between DFM and ADX Institution Name The marketplace, regardless of the products being traded is changing on a daily basis. Organizations are thus forced to accommodate the changing business environments so as to remain relevant or take advantage of a new trend in the market. One of the major steps that organizations are considering is merging with other organization in the same trade. Mergers are especially common when the merger presents a gain to the shareholder of the two companies (Sanghoee, 2005). The following paper will critically analyze the proposed merger of the Dubai Financial Market and the Abu Dhabi Securities Exchange. It will show the advantages of the merger and the potential benefits to the shareholders, the government, and other stack holders. It will also show the likely disadvantages of the merger. The paper will show how various departments in the merging organizations will be affected. Finally, the paper will show instances where mergers are appropriate. The proposed merger between Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) look certain to go through. When the merger happens, it will provide the United Arab Emirates with a phenomenal chance to have one of the strongest securities exchange company with the world. Coming on the heels of the Dubai financial crisis of 2009-2010, which saw the Dubai World ask for a ‘standstill’ in its debt payment program. The announcement made bonds and equity markets come down crashing...
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...Mergers and acquisition Introduction Mergers and acquisitions refer to the business strategy involved with combining, buying and selling of companies. Mergers and acquisitions are done mainly for value creation for shareholders. When a company acquires or purchases another company that is called acquisition and when two companies combine together as single new company, it is called a merger. This essay is intended to present an overall idea of mergers and acquisitions. First part of essay will cover types and concept of mergers in brief and second part will elaborate the concept of acquisition and intentions which may cause the acquisitions. Lastly, a conclusion on the basis of the study will be presented. Mergers Merger is "voluntary amalgamation of two firms on roughly equal terms into one new legal entity." (BusinessDictionary.com). From business structural perspective, following are the types of mergers. When two companies are in direct competition and share the same product line, their merger is called horizontal merger e.g Diahatsu Cuore. A supplier’s and a company’s merger is called vertical merger. e.g wood supplier and furniture maker. When two companies have no common business areas, their merger is called conglomeration. e.g a chain of restaurants with a chain of schools. Mergers are always backed by beneficiary intentions which are ultimately for value creation for shareholders. Economies of scale could be attained by a merger. Joint organizations have...
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...Mergers and acquisition Introduction Mergers and acquisitions refer to the business strategy involved with combining, buying and selling of companies. Mergers and acquisitions are done mainly for value creation for shareholders. When a company acquires or purchases another company that is called acquisition and when two companies combine together as single new company, it is called a merger. This essay is intended to present an overall idea of mergers and acquisitions. First part of essay will cover types and concept of mergers in brief and second part will elaborate the concept of acquisition and intentions which may cause the acquisitions. Lastly, a conclusion on the basis of the study will be presented. Mergers Merger is "voluntary amalgamation of two firms on roughly equal terms into one new legal entity." (BusinessDictionary.com). From business structural perspective, following are the types of mergers. When two companies are in direct competition and share the same product line, their merger is called horizontal merger e.g Diahatsu Cuore. A supplier’s and a company’s merger is called vertical merger. e.g wood supplier and furniture maker. When two companies have no common business areas, their merger is called conglomeration. e.g a chain of restaurants with a chain of schools. Mergers are always backed by beneficiary intentions which are ultimately for value creation for shareholders. Economies of scale could be attained by a merger. Joint organizations have...
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...Horizontal Merger When a merger between companies in the same industry occurs it is called a horizontal merger. Horizontal mergers usually happen in industries with fewer companies, because competition tends to be higher and potential gains in these kinds of mergers often deliver better results. (MBDA, n.d.). Example A merger between Nike and the Rebook shoe companies, for example, would be an example of a horizontal merger. The purpose of a horizontal merger is to create a larger organization with more market control. Because the two companies' operations will be similar, there may be opportunities to join certain operations, like manufacturing, to reduce costs. Vertical Merger A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one. (MBDA, n.d.). Example A vertical merger joins two companies that may not compete with each other, but exist in the same supply chain. Microsoft joining with Intel would be an example of a vertical merger. Such a deal would allow the Microsoft to obtain better pricing on parts and have better control over the manufacturing process. The parts division, in turn, would be guaranteed a steady stream of business. Conglomerate A...
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...Running head: HR'S ROLE IN MERGERS Human Resources Role in Mergers and Acquisitions Carole D. Kindt University of Phoenix HCS 427 Human Resources: Principles and Practice in Health Care Tracie Mileski October 19, 2007 Human Resources Role in Mergers and Acquisitions Merger and acquisition is the general term that describes two companies joining to form one larger company (Mergers and Acquisitions (M&A), 2007). Mergers and Acquisitions and corporate restructuring are large parts of the business world. Some of these transactions are friendly and some not so friendly (Mergers and Acquisitions (M&A), 2007). In either case HR should be involved from the beginning of the merger process rather than calling on them post-merger to begin managing the merger at that point (Lindquist, 2007). HR is uniquely qualified to provide the business acumen, analytical skills, and close collaboration with mangers that is needed to handle the organizational and people issues that a merger raises (Lindquist, 2007). When two companies decide to merge they go through a process called due diligence, this process can take anywhere from months to a year, with the average being about 3 months (no author, 2005). HR professionals are valuable partners when they are utilized during due diligence. Due diligence allows the two companies to provide all the documents concerning their organizations, these documents include compensation rates, bargaining agreements, employment contracts and...
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