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Summary ch.1-4 - FinMan 354 summaries $12.84   Add to cart

Summary

Summary ch.1-4 - FinMan 354 summaries

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I am a third year Bcom Economic student that has a passion for finance. I would love to do my honours in Financial management and that is why I work hard not only in class but after hours as well. I like making notes that is easy to read in my handwriting. Having good notes makes a huge difference ...

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  • September 30, 2024
  • 48
  • 2024/2025
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Chapter 1

Strategic objective Type of transaction


1 Expanding growing in same industry Horizontal congeneric MBA
Joint venture
strategic alliance


2 Expanding into unrelated
industry Conglometric MYA
Joint venture
strategic alliance


3 Gaining control over the supply chain Vertical MRA

4 Seeking operating h financial synergies Horizontal
vertical
congeneric
Conglomerate MBA

5 Accessing new technologies patents Horizontal
licences skills capabilities vertical
congeneric
Conglomerate MYA
Joint Venture
strategic alliances


6Restructuring an entity's organisational Diversities
structure

7 Restructuring an entity's ownership Equity carve outs
and or capital structure spinoffs
Rights issues
Tracking stocks
share repurchase
leveraged recapitalisation
Leveraged buyouts LBO's
management buyouts MBO's
Exchange offers
Dual class recapitalisation

, Mergers




note the term entity is used as mergers are not restricted to
private public listed companies

note an entity's name often reflects the fact that it came into
existence due to a merger

mergers can be
horizontal vertical conglomerate congeneric


1 Horizontal

merger between rivals operating in the same industry

Why




one dissolves into the other entity
entity
small larger

, 2 Vertical mergers

Merger between companies operating different levels
in a supply chain




Why



As lower levels
of competition in a industry can also disadvantage consumers

by other stakeholders vertical mergers beyond a certain transaction size are also
subject to regulatory approval




3 Conglomerate merger


merger between companies operating in different industries



Why




note its very
difficult to manage widely divergent businesses effectively




a congeneric merger

merger between companies that are 1 not producers of the same product

, 2 not in a supplier producer
distruber relationship


As entities are allied in nature they could already share distribution
channels or use overlapping technologies or production systems

why

note
Acquisitions




Most aquisitions A B A Target
becomes
subsidiary of the aquirer
Regulations are NB_

Types horizontal vertical conglomerate congeneric


1 Friendly aquisitions

The target's board considers the aquisitions offer bid
as fair he agrees that the deal would be
mulally beneficial
The target's board hence calls on shareholders to approve proposal


example Absa Nestle



2 Hostile acquisition

Target's board

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