Management and Organizational Studies 1023A/B Lecture Notes - Lecture 8: Market Price, Cash Flow, Spot Contract

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Barry Hawn

Document Summary

Acquisition: the purchases of one firm by another. Merger: the combination of two or more firms into a new legal entity in which one entity keeps their identity while the others lose their identities. Amalgamation: a blending together of two or more entities where both lose their identities and a new separate entity is born. Both (all) sets of shareholders must approve the transaction. Why: related businesses (horizontal relationships, transferring competitively valuable expertise, combining the related activities of separate businesses into a single operation to lower costs, exploiting common use of a well-known brand name. Value creation motivations for m&as: operating synergies, economies of scale: synergy to reduce costs and expenses. Ex. a company is scaling up production increasing in size: economies of scope: synergy to reduce costs and expenses. Increase the scope of the number of products you offer.