Mind map

Takeovers and mergers

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Mind map: Takeovers and mergers

Map content

Merger:
- A merger is when two businesses amalgamate in order to sell together.
  - Horizontal:
  - Vertical:
  - Conglomerate:
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.
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.
Examples: TATA took over Jaguar- for £1.15bn.
- Ford pays $ 600m to the Jaguar and Land Rover pension plans.
  - TATA knew the market better
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