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Takeovers and mergers
- Merger:
- A merger is when two businesses amalgamate in order to sell together.
- Horizontal:
- Vertical:
- Conglomerate:
- Horizontal:
- A merger is when two businesses amalgamate in order to sell together.
- Takeover: A takeover or an acquisition is when another business takes over another business, purchasing 50% of its capital
- Hostile: This is when one business doesn't have a choice and they may reject the takeover; yet they don't have a choice.
- Friendly: This is when the company accepts the purchase and is likely to recommend the shareholders accept the bid.
- Hostile: This is when one business doesn't have a choice and they may reject the takeover; yet they don't have a choice.
- Reasons for mergers and takeovers:
- Growth, economies of scale, protect market share.
- In terms of market share, this can combine there MS to compete with other rivals.
- Economies to make sure that they are efficient, low unit cost.
- Expansion- in terms of growth and price.
- In terms of market share, this can combine there MS to compete with other rivals.
- Growth, economies of scale, protect market share.
- Examples: TATA took over Jaguar- for £1.15bn.
- Ford pays $ 600m to the Jaguar and Land Rover pension plans.
- TATA knew the market better
- TATA knew the market better
- Ford pays $ 600m to the Jaguar and Land Rover pension plans.
- EE mergered together from Orange and T-Moible. Now have unsuccessful profits. Revenue was down slightly at £6.48bn.
- Facebook tookover Snapchat and instagram and whatsapp.
- Snapchat- generating little revenue and not turning profit.
- Instagram: it could become a profit center for Facebook in the future. $1bn
- Whatsapp:WhatsApp brought in $15.921 million
- Snapchat- generating little revenue and not turning profit.
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