4. Two of UK’s larger wine distribution companies, Bibendum and PLB, merged their businesses in October...

4. Two of UK’s larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014. Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a means through which the merger might create value added? Hint: in your response, consider both economies of scale and scope for the new firm structure.

Expert Solution

Answer-

Bibendum and PLB are two larggest wine companies who merged together, and yes their merger suggests a means through which it can create value as;

A) market expansion and new opportunity - before merger both companies had their fixed distribution channel for business as -Bibendum was primarily a restaurant supplier while PLB focused on supplying wines to retailers. But with merger, now both companies can supply their products through each others distribution channel which provides them new business opportunities

B) Increase in supply- when companies gets mergerd they tend to increase their efficiency through their work which means when two wine companies got merged, now they have more resources, larger market to serve and larger demand from the market.

C) Monopoly in the market- SInce two of the largest wine comapnies got merged which means both companies got rid of their toughest competitior, so now there is no one in the market who cancompete with this new merged company which ultimately tend to create monopoly in the market by killing all the competitiors.

Rahul Sunny answered 2 years ago

Two of UK’s larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014....

Two of UK’s larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014. Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a means through which the merger might create value added? Hint: in your response, consider both economies of scale and scope for the new firm structure.

Identify two companies that have recently merged with one another.

Identify two companies that have recently merged with one another. Discuss how the merger went from both a positive as well as a negative perspective.

Considering the effect that the pandemic may have on some businesses and larger companies, would your...

Considering the effect that the pandemic may have on some businesses and larger companies, would your decision to lend to American Airlines change when considering the current situation? American Airlines' biggest liability in their operating income is its contributions to pension plans. It contributed (in millions) $286, $475, and $1,230 in 2017, 2018, and 2019 respectively. Even with these large sums contributed, American Airlines has stayed in the green in net cash earned from operating activities; earning inflows of cash...

4. Imagine that you are asked to choose between two businesses (electric companies) that will supply...

4. Imagine that you are asked to choose between two businesses (electric companies) that will supply electricity to your home. One of these electric companies burns coal in a facility built in 1963. It has not been retrofitted with pollution-control equipment, but it offers electricity at a relatively low price. The other firm has been retrofitted with pollution-control equipment and generates a large percentage of its electricity from dams, windmills, and solar panels but its price for electricity is almost...

Small businesses with 200 employees or less, don’t derive the same benefits as larger companies do...

Small businesses with 200 employees or less, don’t derive the same benefits as larger companies do from budgeting. Do you agree or disagree with this statement? Discuss why small businesses might not choose to extensively engage in the budget process. Also discuss the various benefits of budgeting and state whether it is likely that a small business can reach their goals without engaging in some kind of budget process.

Several years ago, two companies merged. One of the concerns after the merger was the increasing...

Several years ago, two companies merged. One of the concerns after the merger was the increasing burden of retirement expenditures. An effort was made to encourage employees to participate in the 401(k) accounts. Nationwide, % of eligible workers participated in these accounts. The accompanying data table contains responses of employees of the company when asked if they were currently participating in a 401(k) account. Complete parts a through d. No is 11 Yes is 19 a. Determine the sample proportion...

Research the financial press (online media) to find two companies that merged within the last 5...

Research the financial press (online media) to find two companies that merged within the last 5 years. Determine or estimate the following: (maybe the companies, Saudi Aramco and SABIC) Summarize the chronology of events from the first offer that was made by the acquiring firm until the final acquisition was agreed. Include information about other firms that were involved, even in an indirect manner (for example, where there any “white knights” out there?) and the potential synergies that drove the...

October 1993 Marriott Corporation announced plans to divide its operations into two separate businesses (spin off...

October 1993 Marriott Corporation announced plans to divide its operations into two separate businesses (spin off of hotel mgt’ business) – Marriott International: manage Marriott’s hotel chain and receive most of the revenue – Host Marriott: own all the company’s real estate and be responsible for servicing essentially all of the old company’s $3 billion of debt What will happen to Marriott’s stock price and bond price after this announcement?

4. Two companies, X and Y, are competitors in the same industry, but company X is...

4. Two companies, X and Y, are competitors in the same industry, but company X is more efficient at using its resources than company Y. a. If the MRTS is the same in the production processes of both companies, show and discuss how the isoquants will be different for company X than they are for company Y. b. Both companies can hire labor at the same wage, w, but company X is able to pay a lower rent per unit...

Here are data on two companies. The T-bill rate is 4% and the market risk premium...

Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. Company $1 Discount Store Everything $5 Forecasted Return 12% 11% Standard Deviation of Returns 8% 10% Beta 1.5 1.0 1) What would be the fair return for each company, according to the capital asset pricing model (CAPM)? 2) Explain how the CAPM is used to perform this calculation and how a financial advisor would utilize this information to advise a client. 3)...

Question