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Category: Business and Industry
Date Submitted: 07/31/2012 12:07 PM
Assignment
On
Merger and Acquisition
Submitted to :- Submitted by:-
Prof. Raj Rani Bhalla Prateek Mishra
11 BSP0715
Section ‘C’
INTRODUCTION
Mergers and acquisitions (M&A) and corporate restructuring are a big part of the
corporate finance world. Every day, Wall Street investment bankers arrange M&A
transactions, which bring separate companies together to form larger ones.
When they're not creating big companies from smaller ones, corporate finance
deals do the reverse and break up companies through spinoffs, carve-outs or
tracking stocks.
Not surprisingly, these actions often make the news. Deals can be worth
hundreds of millions, or even billions, of dollars. They can dictate the fortunes of
the companies involved for years to come. For a CEO, leading an M&A can
represent the highlight of a whole career. And it is no wonder we hear about so
many of these transactions; they happen all the time. Next time you flip open the
newspaper’s business section, odds are good that at least one headline will
announce some kind of M&A transaction.
Sure, M&A deals grab headlines, but what does this all mean to investors? To
answer this question, this tutorial discusses the forces that drive companies to
buy or merge with others, or to split-off or sell parts of their own businesses.
Once you know the different ways in which these deals are executed, you'll havea better idea of whether you should cheer or weep when a company you own
buys another company - or is bought by one. You will also be aware of the tax
consequences for companies and for investors.
Defining Merger and Acquisition
The Main Idea
One plus one makes three: this equation is the special alchemy of a merger or an...