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M & A class questions with answers
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- Stellenbosch University (SUN)
Financial Management 354- Mergers and Acquisitions. Class questions with answers. Great practice quesions to learn the basic concepts
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Financial Management 354: Mergers and AcquisitionsChapter 1: Introduction
1. Metro-Goldwyn-Mayer (MGM) Studies Inc. is an American media company, involved
primarily in the production and distribution of feature films and tv programs. The company’s
name indicates that a horizontal merger took place at some point during the company’s
history?
True
2. Firm A is the largest in its industry and wants to eliminate its closest competitor (resulting
in a near perfect monopoly). Which transaction would most likely bring this situation about?
A horizontal merger
3. The Walt Disney Company acquired Pixar Animation Studios in 2006 and Marvel Studios
in 2009. Both targets produced animated motion pictures. These two acquisitions have
significantly boosted Walt Disney’s post-acquisition profitability. Both were horizontal
acquisitions.
4. In 2011, Google acquired Motorola Mobility to gain control over a major user of its
Android operating system for smart phones. This was a forward vertical acquisition.
5. Naspers is a SA-based multi-national mass media corporation with operations in internet
services (e.g. price check, OLX), pay television (e.g. DSTV) and print media (e.g. Media24).
According to the CEO the company has the “financial firepower and appetite for more
M&As”. Naspers mostly likely undertakes M&As to:
Grow and gain access to new technologies
6. Uber’s strategy to develop a competitive advantage is?
Differentiation
7. Virseker is an insurance company that targets Afrikaans-speaking clients. Their strategy to
develop a competitive advantage is?
Focus (differentiation)
8. Is post-integration analysis important when two non-profit organisations merge?
Yes
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