10 Apr Corporate F (adegboyego) Mergers and acquisitions are often referred to as the market for corporate control. When a firm acquires a target firm, the
1-)Corporate F (adegboyego)
Mergers and acquisitions are often referred to as the market for corporate control. When a firm acquires a target firm, the acquiring firm takeover control of the corporation being sold. There are several types of mergers which include the horizontal merger whereby a corporation acquires another that falls within the same industry. The vertical merger is the union of two companies in the same industry that are at different stages of the supply-chain process (Kenton, 2020). The conglomerate merger is when firms acquire other firms that are into unrelated business to them. Conglomerate mergers are usually done to expand the portfolio of a corporation but it’s difficult to create value this way. There are several reasons to acquire other firms like for their expertise, vertical integration, monopoly gains, tax savings, earnings growth, and diversification.
Good Match
I believe that Amazon buying UPS would be a good acquisition because Amazon would be able to fulfil all its deliveries without relying on other delivery services to fulfil its order shipments. Amazon will also gain control of UPS global network, routes, planes, trucks and services which will increase the company’s earnings and expertise in delivery services.
Bad Match
A good example of when a merger or acquisition would not be a good match is when a conglomerate merger occurs. If Apple was to merge with Goodyear manufacturing company, this would not be beneficial because it would be hard to establish necessary integration processes and provide value for shareholders.
References
Berk, J. B., DeMarzo, P. M., & Hartford, J. V. (2021). Fundamentals of Corporate Finance. 5th Edition. New York: Pearson.
Kenton, W. (2020). Vertical Merger. Investopedia.com.
2-) Management Theory (Hanin)
1) How do you manage the communication to your staff who have been expecting not to loose their jobs?
It is a hard situation for both the manager and the staff therefore first its important for the message to be delivered in person and one to one and HR should be included in the process. Second its important to discuss with the staff the current situation of the company and how it affected their positions. You should also allow your employees to discuss and ask question, express their view on the situation.
2) What is your role as a leader managing this process knowing you will not be at the new company and you are not allowed to tell the staff?
First I will make sure that my team gets their provision and termination benefits they deserve. I will provide support and advice. Finally i will provide them with reference letters and other job opportunities in advance, so that employees who have been laid off can prepare for the future.
Whetten, D. A., & Cameron, K. S. (2016). Developing Management Skills. 10th Edition. New York: Pearson.
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