Management and Organizational Studies 3370A/B Lecture Notes - Lecture 8: Vertical Integration, Supermajority, Investment Banking

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Maria Ferraro

Document Summary

Acquisition - the purchase of one firm by another. Merger - the combination of two firms into a new legal entity. Amalgamation - a genuine merger in which both sets of shareholders must approve the transaction. Combining the related activities of separate businesses into a single operation to lower costs. Exploiting common use of a well-known brand name. Vertical integration extends a firm"s competitive scope within same industry. Can aim at either full or partial integration. Favors capitalizing on a portfolio of businesses that are capable of delivering excellent financial performance. With high growth potential but are short on investment capital. The primary motive should be the creation of synergy. Synergy value is created from economies of integrating a target and acquiring a company; the amount by which the value of the combined firm exceeds the sum value of the two individual firms. New management team will be more efficient and add more value than what.