January 2018
Beginner
976 pages
142h 14m
English
LG1
Firms sometimes use mergers to expand externally by acquiring control of another firm. Whereas the overriding objective for a merger should be to improve the firm’s share value, a number of more immediate motivations such as diversification, tax considerations, and increasing owner liquidity frequently exist. Sometimes mergers are pursued to acquire specific assets owned by the target rather than by a desire to run the target as a going concern. Here we discuss merger fundamentals: terminology, motives, and types. In the following sections, we will describe the related topics of leveraged buyouts (LBOs) and divestitures and will review the procedures used to analyze and negotiate mergers.
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