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Phuong Pham

MERGERS

In the world of business, mergers and acquisitions are commonplace. In the world of investing, recent mergers and acquisitions often draw significant amounts of interest from institutions as well as individual investors. Although the term mergers and acquisitions are used together, they are not synonymous. Mergers and acquisitions mean different things.

There are several reasons behind mergers and acquisitions. Cutting down expenses and increasing revenues is one of the reasons. According to the article “Notable Mergers and Acquisitions of the Day 09/2: (SYT) (HIW)”, the Highwoods Properties, Inc. (NYSE: HIW) has acquired Two Alliance Center. The Company's all-in investment is determined by deducting $6.4 million of closing credits received from the seller, consisting of $5.3 million for free rent and $1.1 million for committed future tenant improvements under certain existing leases, from the $152.3 million gross price stated in the contract. The Company noted that under GAAP, free rent credits from a seller are recorded as a reduction in the investment cost rather than as rental income.

Italian construction company Impregilo and peer Salini approved a cooperation deal on Tuesday 9/25/12 as a first step towards their merger that could bring extra contracts worth up to 6.4 billion euros ($8.30 billion) by 2017, according to the website www.reuters.com. Hindrances may be in the form of insufficient investment capacity, excessive competition due to which the company is not able to keep pace with other companies. Under such circumstances, when a company is not self-sufficient to operate on its own, the subsidiaries may merge with the parent company for better output.

Mergers and acquisitions bring a number of changes within organizations. Different industry has different level of competitions after the mergers and acquisitions. Mergers and acquisitions have different impact as far as market competitions are concerned. For example, the...