L e s s o n   7 :   B u s i n e s s   V a l u a t i o n   a n d   C o r p o r a t e   R e s t r u c t u r i n g  B r i e f l y   d e s c r i b e   e a c h   o f   t h e   f o l l o w i n g   m o t i v e s   f o r   m e r g i n g : g r o w t h  o r   d i v e r s i f i c a t i o n, s y n e r g y, f u n d   r a i s i n g, i n c r e a s e d   m a n a g e r i a l   s k i l l   o r  t e c h n o l o g y, t a x   c o n s i d e r a t i o n s, i n c r e a s e d   o w n e r s h i p   l i q u i d i t y ,   a n d  d e f e n s e   a g a i n s t   t a k e o v e r.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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L e s s o n   7 :   B u s i n e s s   V a l u a t i o n   a n d   C o r p o r a t e   R e s t r u c t u r i n g 

  1. B r i e f l y   d e s c r i b e   e a c h   o f   t h e   f o l l o w i n g   m o t i v e s   f o r   m e r g i n g :
    • g r o w t h  o r   d i v e r s i f i c a t i o n,
    • s y n e r g y,
    • f u n d   r a i s i n g,
    • i n c r e a s e d   m a n a g e r i a l   s k i l l   o r  t e c h n o l o g y,
    • t a x   c o n s i d e r a t i o n s,
    • i n c r e a s e d   o w n e r s h i p   l i q u i d i t y ,   a n d 
    • d e f e n s e   a g a i n s t   t a k e o v e r.
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T o p i c :   B u s i n e s s   V a l u a t i o n   a n d   C o r p o r a t e   R e s t r u c t u r i n g

D e f i n e   a n d   d i f f e r e n t i a t e   a m o n g   t h e   m e m b e r s   o f   e a c h   o f   t h e   f o l l o w i n g   s e t s   o f   t e r m s  :

  1. m e r g e r s ,   c o n s o l i d a t i o n s ,   a n d   h o l d i n g   c o m p a n i e s;
  2. a c q u i r i n g   c o m p a n y   a n d   t a r g e t   c o m p a n y ;
  3. f r i e n d l y   m e r g e r   a n d   h o s t i l e   m e r g e r ;   a n d 
  4.  s t r a t e g i c   m e r g e r   a n d   f i n a n c i a l   m e r g e r .
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