Takeovers and mergers

Takeovers and mergers

1. Merger:

   • A merger is when two businesses amalgamate in order to sell together.
     • Horizontal:
     • Vertical:
     • Conglomerate:

2. 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.

3. 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.

4. Examples: TATA took over Jaguar- for £1.15bn.

   • Ford pays $ 600m to the Jaguar and Land Rover pension plans.
     • TATA knew the market better

5. EE mergered together from Orange and T-Moible. Now have unsuccessful profits. Revenue was down slightly at £6.48bn.

6. 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