Takeovers and mergers

Mind Map by fchitunhu, updated more than 1 year ago
Created by fchitunhu over 6 years ago


For BUss4

Resource summary

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