Question

In: Finance

What companies do you think would be good merged or one acquired by the other? What...

What companies do you think would be good merged or one acquired by the other? What do you think would be the worst possible mergers/acquisitions that have not happened and could? Why?

Solutions

Expert Solution

Merger means combining two or more corporations into one single entity to avail the benefit of synergies.Acquisition means takeover of one company by the other.

A good Merger and acquisition is one where the the aquiree company is a part of the producition chain of aquirer company or where aquirer already has experience in the sector in which aquiree company is working.

For example, TATA's aquisition of Jaguar. TATA already had a subsidiary TATA Motors and it has experience in motor division as well. The aquisition of Jaguar has contributed to great synergies for TATA. It is one of the best deals that TATA have.

Worst merger and aquisition are opposite to the once already mentioned above. If a company goes for rash aquisition and aquire a company of which they have no experience or which could bring synergies to the aquirer company.

For example- TATA's aquisition of Corus steels led to huge losses for TATA and its profitability reduced to great extent.


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