Free Essay

Imminent Merger

In: Business and Management

Submitted By salmanmak
Words 286
Pages 2
Imminent Merger Personally, I don’t think there is something wrong with buying stock. I will use utilitarianism approach to justify buying stocks. When I was new to the business I always used to think that there are a lot of unethical dealings which are going on in our society, but later I realized that those aren’t unethical instead it’s a matter of personal choice in deciding what’s right and what’s wrong. In our case, the merger of the companies will inevitably happen and investing in stock will not harm both companies. According to Utilitarianism, we should choose the option that “maximizes utility,” i.e. that action or policy that produces the largest amount of good. Using the Utilitarianism approach, the good will outweigh the bad consequences when not considering the legal issue. The consequences of investing in the stocks will produce a good outcome in being able to cover the expenses of my daughter’s medical treatment and will help to keep my family members from being burdened with financial debt. Furthermore, buying stocks will not harm either company. I would be more concerned with increasing the happiness of my family while not costing anyone. Looking at the consequences of not purchasing the stock, has the adverse effect of the utilitarian approach. We never know what can be the outcomes of the merger. It can lead to lowering down the pay or even laying off hundreds of employee including your own position. Overall, if we compare above pros and cons, purchasing the stock will be the best interest because it has a possibility of producing the best consequences by the maximizing happiness of my family while the cost of buying stock to the company is minimum.

Similar Documents

Premium Essay

Credit Suise - Glencore Xstrata Analysis

...10 October 2011 Europe Equity Research Diversified Metals & Mining (Metals & Mining) Glencore and Xstrata Research Analysts Liam Fitzpatrick 44 20 7883 8350 liam.fitzpatrick@credit-suisse.com Michael Shillaker 44 20 7888 1344 michael.shillaker@credit-suisse.com Nihal Shah 44 20 7888 3270 nihal.shah@credit-suisse.com James Gurry 44 20 7883 7083 james.gurry@credit-suisse.com Specialist sales: James McGeoch +44 20 7888 0751 james.mcgeoch@credit-suisse.com COMPANY UPDATE Merger potential ahead? Figure 1: Glencore vs XTA 12 month forward P/E 9.0 8.0 7.0 6.0 5.0 4.0 1 a 9-M y 2 a 6-M y 2 n -Ju 9 n -Ju 1 6-Jun 2 3-Jun 3 0-Jun 7 l -Ju 1 4-Jul 2 1-Jul 2 8-Jul 4 ug -A 1 ug 1-A 1 ug 8-A 2 ug 5-A 1 ep -S 8 ep -S 1 ep 5-S 2 ep 2-S 2 ep 9-S GLEN.L XTA.L Source: IBES consensus; prices as of 5 October 2011 ■ Summary: Following the recent underperformance and de-rating of XTA vs. Glencore, we examine the potential for an XTA-Glencore merger in this report. In keeping with its previous statements, we believe Glencore sees strong benefits to a deal and a combination would create an attractive highgrowth and differentiated major. The longer the relative rating gap exists, the greater the market’s focus on a potential transaction will likely become, in our view. At current levels, Glencore could use its premium-rated equity and pay a significant premium without a deal being dilutive, on our estimates. ■ Potential synergies: The main area of potential synergy we see is......

Words: 1175 - Pages: 5

Premium Essay

Sector Financiero Mexico

...Contenido ------------------------------------------------- 1. – Datos de la industria financiera en México 1 2.- Sector bancario 2 3.- Sector seguros y fianzas 4 4.- Casas de bolsa 5 5.- PEGs y VCs 6 6.- Noticias de M&A en la industria 7 7.- Asociaciones en la industria 13 ------------------------------------------------- Industria Financiera El sector financiero está compuesto por diferentes empresas, entre las que destacan bancos, bancos de desarrollo, casas de bolsa, el mercado de valores, compañías de seguros y fianzas, uniones de crédito, SOFOLes, SOFOMes, sociedades de inversión, banca de inversión, grupos de capital privado, venture capital, pensiones y otros servicios complementarios. La parte bancaria del sector se desenvuelve mejor en un ambiente macroeconómico de bajas tasas de interés, inflación controlada y crecimiento sostenido ya que los bancos ganan de poder obtener recursos con bajo costo y prestarlos con ganancia. Una economía fuerte es una economía que requiere créditos para la inversión y el consumo, lo que beneficia al sector bancario. Datos de la industria en México * El sector financiero representa 4.8% del PIB mexicano al cuarto trimestre del 2011, de acuerdo al INEGI. * Se cuenta con sólo una bolsa de valores, la cual contaba con una capitalización de 729B de USD al término de 2010. Es la segunda más grande de Latinoamérica después de Brasil. * De acuerdo a BBVA Research el crédito bancario es la segunda......

Words: 5283 - Pages: 22

Premium Essay

Mergers and Acquisitions Basics

...Mergers and Acquisitions Basics Mergers and Acquisitions Basics All You Need To Know Donald DePamphilis Amsterdam • Boston • Heidelberg • London New York • Oxford • Paris • San Diego San Francisco • Singapore • Sydney • Tokyo Academic Press is an imprint of Elsevier  Academic Press is an imprint of Elsevier 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA Elsevier, The Boulevard, Langford Lane, Kidlington, Oxford, OX5 1GB, UK Copyright © 2011 Elsevier Inc. All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Details on how to seek permission, further information about the Publisher’s permissions policies and our arrangements with organizations such as the Copyright Clearance Center and the Copyright Licensing Agency, can be found at our website: www.elsevier.com/permissions. This book and the individual contributions contained in it are protected under copyright by the Publisher (other than as may be noted herein). Notices Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary. Practitioners and researchers must always rely on their own experience......

Words: 105288 - Pages: 422

Premium Essay

Tactics Which Can Support a Strategy of Growth

...development (R&D) operations to improve expansion. Second, another UK pharmaceutical company AstraZeneca carried out takeovers of bio-science firms (mergers and acquisitions M&A). Compare and contrast these two approaches to growth by discussing their relative advantages and disadvantages. Use examples from any relevant sector, not just "Big Pharma". Summary The paper presents a contrast between conservative and aggressive growth options. It discusses mergers and acquisitions, organic growth and alliances using examples from a range of industries which include online businesses, brewery firms, soft drink giants and also a major pharmaceutical industry merger. In examining the interface between the different growth options the paper posits that they are not mutually exclusive and one may lead to the other, whereas a portfolio of growth options is strategically astute to have. The advantages, disadvantages and issues surrounding the growth options suggest that it is a risk-benefit premise that underpins the value perceptions from a chosen growth route. Competitive situations and resourcing s aspects also govern the choice a chosen route. 1. Introduction This paper discusses the different routes to growth that an enterprise might take. Given the growing popularity and mixed success of aggressive growth option of mergers and acquisitions, the paper compares and contrasts them with more conservative options like...

Words: 928 - Pages: 4

Premium Essay

Hihiheeh

...headquartered in Ashburn, Virginia. The corporation was originally formed as a result of the merger of WorldCom and MCI Communications. For a time, WorldCom was the United States's second largest long distance phone company (after AT&T). WorldCom grew largely by aggressively acquiring other telecommunications companies, most notably MCI Communications. It also owned the Tier 1 ISP UUNET, a major part of the Internet backbone. It was headquartered in Clinton, Mississippi, before being moved to Virginia. Corporate founding The company began as Long Distance Discount Services, Inc. (LDDS) in 1983, based in Hattiesburg, Mississippi. In 1985 LDDS selected Bernard Ebbers to be its CEO. The company went public in 1989 through a merger with Advantage Companies Inc. The company name was changed to LDDS WorldCom in 1995, and later just WorldCom. The company’s growth under WorldCom was fueled primarily through acquisitions during the 1990s and reached its apex with the acquisition of MCI in 1998. Among the companies that were bought or merged with WorldCom were Advanced Communications Corp. (1992), Metromedia Communication Corp. (1993), Resurgens Communications Group(1993), IDB Communications Group, Inc (1994), Williams Technology Group, Inc. (1995), and MFS Communications Company (1996). The acquisition of MFS included UUNET Technologies, Inc., which had been acquired by MFS shortly before the merger with WorldCom. In February 1998, a complex transaction saw WorldCom purchase......

Words: 363 - Pages: 2

Premium Essay

Hr Issues in M&a

...TABLE OF CONTENTS EXECUTIVE SUMMARY 3 MERGERS & ACQUISITIONS 4 DISTINCTION BETWEEN MERGERS AND ACQUISITIONS 5 TYPES OF MERGERS AND ACQUISITONS 7 Horizontal Merger 7 Vertical Merger 7 Co-Generic Merger 7 Conglomerate Merger 7 RECENT EXAMPLES 8 REASONS FOR MERGERS AND ACQUISITIONS 10 Growth of the company 10 Synergy 10 Diversification and expansion 11 Elimination of competition 11 × REASONS WHY MERGERS AND ACQUISITONS CAN FAIL 12 No common vision 12 Weak leadership and poor governance 12 Poor strategic fit 12 Cultural and Social Differences 13 Incomplete and Inadequate Due Diligence 13 Poorly Managed Integration 13 Overpaying the target company 13 Changing market condition 13 ARTICLE STATING REALITIES OF M&A for HR 14 SUCCESS MANTRA for M & As 15 Cultural integration 15 Change Management 16 Management resources 16 Role of HR in M&A’s 18 Three Stage Model of Mergers and Acquisitions 21 Stage 1-Pre-Combination (HR Issues): 21 Stage 2-Combination and Integration (HR Issues): 22 Stage 3: Solidification and Assessment (HR Issues): 22 Role of the HR Department in M&A Activity 23 INDUSTRY EXAMPLE – Schnieder 26 Challenges due to acquisitions 26 Industry Example – MTS 29 Conclusions 30 At the Company Level 30 At the HR Level 31 REFERENCES 33 EXECUTIVE SUMMARY Mergers and acquisitions, as a means of rejuvenating and restoring business, have become increasingly......

Words: 7368 - Pages: 30

Premium Essay

Business at It's Best

...Management Fall 2009 Non-financial risk assessment in mergers, acquisitions and investments Identifying sources of business risk in the ICT industry Bachelors thesis Erik Allenstr¨m, 1984-11-26 o Fredrik Njurell, 1984-01-30 ¨ Tutor: Osten Ohlsson January 14, 2010 Abstract The number of company mergers and acquisition activities has increased dramatically the last two decades. The reasons for conducting these activities are many and the uncertainties of their results are high. To reduce the uncertainties when making an investment, merger or acquisition it is vital to do a thorough assessment of the risks involved with the activity. This thesis focuses on a specific part of this risk assessment, namely the non-financial risks. Mergers and acquisitions are done in almost all industries around the world and the reasons for and benefits of these activities can vary between industries. We have chosen to investigate the risk assessment of non-financial risks in the Information and Communication Technology (ICT) industry. The thesis aims at investigating what business characteristics, for companies in the ICT industry, that give rise to non-financial risks that must be assessed when doing investments, mergers or acquisitions. Further on we present a risk pattern that points out what business characteristics that are the most important when conducting a risk assessment of non-financial risks on companies in the ICT industry. From a literature study we find evidence that ten......

Words: 24602 - Pages: 99

Premium Essay

M&a Perspective

...New Evidence and Perspective on Mergers – A One Page Summary The authors of this article have provided further evidence on the value of mergers and acquisitions by updating the database to include facts for the 1990s to empirical research. They came to a conclusion that mergers seem to create shareholder value, with most of the gains accruing to the target company. In arriving at their conclusion, they reviewed issues on why mergers occur. They reviewed reasons for merger that appear to be more relevant in certain time periods. They argue that industries tend to restructure and consolidate in concentrated periods of time, that these changes occur suddenly, and that they are hard to predict. However, they state that explaining the long-term effects of mergers, and what makes some successful and others not, is still a question that remains largely unanswered. They also identify that, although merger and acquisition activity, occurs in readily identifiable waves over time, these waves are not alike. In fact, the identity of the industries that make up each merger boom varies tremendously. After identifying why and how mergers occur, the authors go ahead to identify winners and losers in the merger game. They identify that the most statistically reliable evidence on whether mergers create value for shareholders comes from traditional short-window event studies. The authors argue that the target firms consistently have abnormal returns of 16% in the announcement period across......

Words: 457 - Pages: 2

Premium Essay

Symantec Corporation - Mergers and Acquisitions

...| Symantec Corporation | Mergers and Acquisitions | | Chris Miller | 11/9/2011 Dan SalmApplied Microeconomic Theory | | * Introduction * This research paper attempts to give a view of the traditional theory relating to Symantec Corporation and their acquisitions and mergers in an attempt to gain market control. Mergers and acquisitions correspond to change within a business looking to gain market power. No other experience is harder to attain for a company, represents more of a challenge, or as hectic as an acquisition or merger. It is vital that the management understands the methods required to perform acquisitions and mergers and that they have a clear understanding of how the procedure works. A corporate merger is the amalgamation of two company’s liabilities and assets developing into a single business element. Acquisitions occur when a large company, typically in a monopolistically competitive market, encompasses a smaller company giving the larger company a monopolistic advantage. A merger occurs when the amalgamation of liabilities and assets is depicted to be between companies of equal market standing. Within a company merger of estimated equals, there is typically an exchange of company stocks where one business distributes new shares to the shareholders of the other company at a specified percentage. * “Those who boast of their commonsense approach to management are very probably just following the ill-formed, half-forgotten, pseudo-scientific......

Words: 2655 - Pages: 11

Premium Essay

Merger

...Mergers And Acquisitions: Shareholder Wealth Effects Mergers and acquisition otherwise identified as M& A defines an aspect of corporate management strategy, as well as corporate finance that deal with the selling, the buying and dividing of the various companies. It also involves combining the various companies and similarly oriented identities which could assist a given enterprise to grow rapidly within its sector of origin, or even a new field or location even without necessarily creating some subsidiary or joint type of a venture. The actual distinction which exists between a merger and an acquisition has been seen to become increasingly blurred in several aspects. This has been seen to be significant particularly in terms some ultimate economic outcome. Acquisition normally refers to the process of significantly smaller firms by a significantly large firm. However, it is notable that in some instances, a smaller firm could acquire some management control of a significantly larger firm or even a longer established firm in an effort to retain the real name of the latter for some past acquisition entity through combined efforts. This normally results into a reverse takeover and affects all the shareholders who are involved within the two firms. According to research study done by Ang and Kohers across the US territory, a reverse merger could also affect the shareholders in significant ways. This is because the merger enables a given private company to become......

Words: 1788 - Pages: 8

Premium Essay

Global Strategic Analysis Adidas and Reebok Merger Acquisition

...Contemporary Issues in Management Case study: Global Strategic Analysis Adidas and Reebok Merger Acquisition ABSTRACT 3 INTRODUCTION 4 LITERATURE REVIEW 5 ANALYSIS AND FINDINGS 8 VMOST 7 VISION 7 MISSION 7 OBJECTIVES 7 STRATEGIES 7 TACTICS 7 ACQUISITION 8 SWOT ANALYSIS 9 BEFORE ACQUISITION WITH REEBOK 9 STRENGTHS 9 WEAKNESSES 10 OPPURTUNITIES 10 THREATS 11 AFTER ACQUISITION WITH REEBOK 11 STRENGHTS 11 WEAKNESSES 11 OPPURTUNITIES 12 THREATS 12 CONCLUSION 13 REFERANCES 14-15 ABSTRACT The purpose of this report is to evaluate the impact of adidas pending acquisition of Reebok on the sporting goods industry in relationship to Nike position. Evaluation of background information and corporate culture combined with VMOST and SWOT analyses to helped form the arguments presented in this report and have assisted in answering the question, Will adidas forthcoming takeover of Reebok help the new company achieve sustainable competitive advantage over industry leader Nike?. This research was based on the subject that is illustrating an evaluation of the impact of Adidas from acquisition reebok. Furthermore, an investigation of the strengths, weaknesses, opportunities and threats (SWOT) related to companies in the sports industry was conducted. On the one hand it was found that Adidas historically grown...

Words: 3657 - Pages: 15

Premium Essay

Finance

...Chapter 1. Introduction to Mergers and Acquisition 1.1 Mergers and acquisition To opt for a merger or not is a complex affair, especially in terms of the technicalities involved. We have discussed almost all factors that the management may have to look into before going for merger. Considerable amount of brainstorming would be required by the managements to reach a conclusion. e.g. a due diligence report would clearly identify the status of the company in respect of the financial position along with the networth and pending legal matters and details about various contingent liabilities. Decision has to be taken after having discussed the pros & cons of the proposed merger & the impact of the same on the business, administrative costs benefits, addition to shareholders' value, tax implications including stamp duty and last but not the least also on the employees of the Transferor or Transferee Company. Merger: Merger is defined as combination of two or more companies into a single company where one survives and the others lose their corporate existence. The survivor acquires all the assets as well as liabilities of the merged company or companies. Generally, the surviving company is the buyer, which retains its identity, and the extinguished company is the seller. Merger is also defined as amalgamation. Merger is the fusion of two or more existing companies. All assets, liabilities and the stock of one company stand transferred to transferee company in......

Words: 1872 - Pages: 8

Premium Essay

Inf 620

...RWC 1: Cogent Communications, Intel, and Others: Mergers go more smoothly when your Data are Ready Case Study Questions 1. Place yourself in the role of a manager at a company undergoing a merge or acquisition. What would be the most important things customers would expect from you while still in that process? What role would IT play in meeting those expectations? Provide at least three examples. Role: Customers expect the same or better service than they are currently receiving-though they likely fear a service disruption. IT plays a significant role if not as a service provider than at least as a vehicle for communications between the organization and its customers. Examples: Banking, telecommunications, and Internet service providers. 2. Focus on what Andi Mann in the case calls “tribal knowledge.” What do you think he means by that, and why is it so important to this process? What strategies would you suggest for companies that are faced with the extensive presence of this issue in an acquired organization? Develop some specific recommendations.l Tribal Knowledge: Is the organizational knowledge maintained in the minds of its employees. In many cases, only experienced employees possess information about who does what, when, and why. While these employees may be redundant following a merger, losing them would mean losing information critical to maintaining the acquired organization’s systems. This loss could result in a disruption of critical......

Words: 505 - Pages: 3

Premium Essay

Marketing Outline

...Marketing Strategy Outline Having a business or acquiring a new acquisition in other countries entails lots of hard work and different types of marketing segmentation. Whipkey is part of a growing organization that is now interested in having an establishment in Japan. The new decision to acquire a new establishment in Japan requires some marketing strategies. In doing this, the company has to understand the culture and nature of Japanese business in order to penetrate the market effectively. As a member of Whipkey management team, presentation will be focusing on Whipkey’s approach to acquisition such as International segmentation, effective and strategic communication in global organizations, Impact of Cultural Barriers on Communication Strategy, and ERP systems. However, there are issues related to marketing and promotion of the acquisition that can impact decision making within management. These issues needed to be tackle and resolve before acquisition can take place. Communication, retaining key talent, and integrating cultures are part of the issues that affects marketing and promotion of new acquisition. These factors are some of the critical challenges Whipkey ownership has to look into. It is difficult enough to run strong a team that has a unified culture with good leadership experience not to talk of acquiring a new company with various backgrounds. Communication is very important within the organization and outside the organization. “An effective......

Words: 649 - Pages: 3

Premium Essay

Inter Clean

...risk assessments, and concluding preparation to achieve the new direction of the company. InterClean is a heavy weight within the solution and cleaning sector. Because of the demands the company redirected the attention to services and solutions rather than just services and products. InterClean wanted to begin a new solution-base marketing selling within the next three-six months. For the company to make the transition, InterClean has planned some changes within the company’s sales department. The company is also pondering over hiring additional staff members to obtain the company’s goals. Situation Analysis Issue and Opportunity Identification The new company’s first step would be to focus on completing the merger. With every merger brings forth problems. It is self evident that research shows that when things are not handled properly the outcome is not positive. One thing that...

Words: 550 - Pages: 3