Federal Trade Commission (FTC) Categories
- Vertical merger
- Horizontal merger
- Product extension merger
- Market extension merger
- Conglomerate merger ==
A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.
Read more: http://www.investopedia.com/terms/c/conlgomeratemerger.asp#ixzz1vXqgA28E
Why are so many M & As ?
1. To ensure their survival
2. Free cash flow
3. Agency problems
4. Managerial hubris == Managerial hubris is the unrealistic belief held by managers in bidding firms that they can manage the assets of a target firm more efficiently than the target firm's current management. Managerial hubris is one reason why a manager may choose to invest in a merger that on average generates no profits. (By Wiki)
5. Potential for profit
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