Verified Document

Mergers And Acquisition Company Acquisition As A Essay

Mergers and Acquisition Company Acquisition

As a CEO, you are trying to acquire a foreign firm. The size of your firm will double and it will become the largest in your industry. What does your firm do and what does the foreign firm you are trying to acquire do? Where are the firms based?

look company is a major company in Ohio Columbus in the U.S. And specializes is the sale of all types of spectacles both for the visually impaired or those with visual problems and sun glasses of all designs. This company has been in operation from 1998 and seeks to expand its operations into the African market by acquiring Yengo enterprises which operates in the major East African cities; that is, Nairobi, Kampala and Kinshasa. As the CEO of I-Look enterprises, I need to take into account the following issues discussed below.

There are many reasons why companies owners decide to sell it. Some of these reasons include lack of finance to inject into the company to make it better, retirement plans, in cases of partnerships, there may be disagreements among the partners, reduction of risks from liabilities, poor health or death of the owner, and finally, poor management of the business due to the owner lacking prerequisite skills (Sherman, 2010). On the other hand, a company may have several reasons to acquire another company. The main reason for acquisition may be a projected increase in cash flows and the combined business after acquisition should add value in the financial and market sense (Miller, 2011).

Before making the acquisition, it is paramount for the buyer to analyze the return on investment envisaged in the transaction. In essence, the acquisition will be carried out under certain limits; the availability of funds, availability of opportunity and the expected return...

Therefore, the buyer should weigh his options and ensure that, by comparing several investment options, the right decision is made. Moreover, it is prudent for the buyer to consider the risks involved. This, in most cases, involves a comparison between all the possible positive and negative outcomes and weighting them by their probability. In other words, investors must be loss averse to safeguard from making losses. However, it is also important for the buyer to realize elemental risks in all transactions and therefore should not be discouraged on intimidated by it (Miller, 2011). In order to fully implement an acquisition, a buyer must follow sure that he prepares himself fully by following some fundamental steps. The first step is assembling a team comprising of both internal and external advisors. This team may be made up of accountants, lawyers, bankers, insurers and valuation experts. The main objectives on this team's shoulders are to focus on the fundamentals of the acquisition process such as the expansion of markets, product mix, integration issues, and the distribution channels. In addition, this team serves as a think-tank and it upon the CEO to ensure that all the team members have been assigned specific responsibilities and have a spokesperson. (Sherman, 2010).
After a well coordinated team has been put in place, the next step for the buyer is planning for the acquisition. This plan is charged with identifying the specific objectives and analyzes the potential targets for the acquisition. This plan also involves identifying value addition and cost savings advantages that will be derived from the acquisition transaction. Generally, acquisitions are triggered by the some pertinent issues such as growth in market, new markets access, new products, access to talented…

Sources used in this document:
Most sellers are prone to number of mistakes and it is wise that they are enlightened in order to avoid making the same mistakes. These mistakes include being indecisive and impatient. If a seller appears to be too anxious, buyers tend to make use of this to push for a lower price whereas if the seller takes too long, the opportunity to sale may pass them by, therefore timing is very paramount. Moreover, the seller must be very careful to ensure that the details of the sale are made public at the opportune time. If the seller informs the employees of the sale too soon, some of the top management may decide to leave for fear of losing out. Creditors and suppliers may also be doubtful of the credibility of the business and put more pressure for outstanding debts or be reluctant to continue supplying (Sherman, 2010).

You are very enthusiastic about the opportunity to be a leading captain of industry and the associated power, prestige, and income. (You expect your salary, bonus, and stock option to double next year). However, you are troubled by the fact that 70% of mergers and acquisitions (M&As) reportedly fail. How would you proceed?

There are a number of reasons why acquisitions fail. In most cases, lack of the acquirer to fully analyze the commercial, financial or strategic implications may be the main reasons for the acquisition to collapse. It is important for the acquirer to find out if the management is running the business smoothly enough before adding more responsibilities. If the management team is experiencing hurdles in the business before acquisition, it becomes obvious that an acquisition will not fare well. Compaq's
Cite this Document:
Copy Bibliography Citation

Related Documents

Mergers Acquisitions and Downsizing
Words: 1278 Length: 4 Document Type: Essay

Mergers, Acquisitions, And Downsizing Difference between a merger, acquisition and a downsizing All the three are management strategies dealing with the competitiveness of the companies in subject (Cassiman, 2006). The choice for either of the three depends on the interest of the subject company in their relationship with the other companies in the industry. The differences arise from the various components such as their concepts, size, application and the condition for their

Merger, Acquisition and International Strategies Mergers, Acquisitions...
Words: 2103 Length: 7 Document Type: Essay

Merger, Acquisition and International Strategies Mergers, Acquisitions and International Strategies A merger is a combination of two or more business entities with the aim of consolidating the resources that they have and creating a single entity with that. The process of merging is done through acquisition or direct pooling together of the resources available. Acquisition occurs when a firm buys a stake in another firm and assumes control of it. Acquisitions are

Acquisition Merger Acquisition International Strategies Merger, Acquisition,...
Words: 1903 Length: 6 Document Type: Essay

Acquisition Merger Acquisition International Strategies Merger, Acquisition, International Strategies Merger, Acquisition, International Strategies For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. Corporation With around 12,000 employees, Yahoo is a multinational corporation that offers internet-based services. The company offers search engine,

Mergers, Acquisition and Other Types of Multi-Entity
Words: 633 Length: 2 Document Type: Essay

Mergers, acquisition and other types of multi-entity deals have been common instruments in the economy to increase market share, gain new businesses and customers, expand the business and become more competitive. More and more in the last years, this practice has been common in the health industry, with hospitals attempting to achieve similar objectives through mergers and multi-hospital deals. An issue in their case, however, is that the health

Motives Behind Mergers Acquisitions and Downsizing
Words: 937 Length: 3 Document Type: Essay

Mergers, Acquisitions and Downsizing How does the role of a company's motivation determine the selection of a business initiative of a merger, acquisition or a downsizing? Your answer should summarize the role of the economies of scale and be adapted to include a corporate example (current or past employer should be utilized). The current employer that will be examined is how various services are delivered to the public from local government

Gung Ho Negotiation Conflict Resolution Mergers Acquisitions
Words: 580 Length: 2 Document Type: Essay

GUNG HO Negotiation Conflict Resolution Mergers Acquisitions You required obtain Gung Ho film, locate case articles mergers acquisitions literature, prepare a paper analyze typical leadership dilemmas conflicts occur organizations merge. Gung Ho!: Communication complications in the wake of corporate mergers It is an often-cited truism that if you want to seem to have great fortune-telling abilities, it is wise to predict that a corporate merger is bound to fail. The reasons for the

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now