UNIVERSITY OF NAIROBI
SCHOOL OF BUSINESS
MASTERS OF BUSINESS ADMINISTRATION
COURSE: FINANCIAL SEMINAR
COURSE CODE: DFI 605
SEMESTER: JANUARY-APRIL 2012
CLASS PRESENTATION: GROUP NINE PRESENTATION
TOPIC: MERGERS AND ACQUISITIONS, MODERN THEORY OF CORPORATE CONTROL COURSE INSTRUCTOR: MIRIE MWANGI
| REGISTRATION NUMBER
JACQUELYNE M. ODERO
JOSEPHINE M. ODERA
In today’s globalised economy, mergers and acquisitions (M&A) are being increasingly used the world over, for improving competitiveness of companies through gaining greater market share, broadening the portfolio to reduce business risk, for entering new markets and geographies, and capitalizing on economies of scale. This document is structured in three parts. The introductory section provides an overview of the definition of mergers and acquisition, motives and the types of mergers and acquisitions. Part one of the document provides the historical evolution of the mergers and acquisition activity in the United States, explaining the environment in which they took place. I then explain the theoretical motivations for mergers and acquisitions, focusing in rational and irrational behaviors. Part two discusses the various empirical studies undertaken in the field. Finally, a discussion of unresolved issues around the topic.
Analysis of Variance
KPMG Kenya Peat Marwick Group M & A s
Mergers and acquisitions
TABLE OF CONTENT
1.1 Definition of Mergers and Acquisitions
1.2 Motives for Mergers and Acquisition
1.2.2 Accelerated Growth.
1.2.3 Enhanced Profitability:
1.2.4 Diversification of Risk:.
1.2.5 Reduction in Tax Liability.
1.2.6 Increased Market Power:
1.2.7 Obtaining a Good Buy:
1.3 Types of Mergers and Acquisitions
1.3.1 Horizontal Merger and Acquisitions
1.3.2 Vertical Merger and Acquisitions
Conglomerate Merger and Acquisitions
1.3.4 Financial Acquisitions
2.0 HISTORICAL DEVELOPMENT OF MERGERS AND ACQUISITIONS
2.1.1 First Wave Period (1893-1904)
2.1.2 Second Wave Period (1919-1929)
Third Wave Period (1955-1969-73)
2.1.4 Fourth Wave Period (1974-80-1989)
2.1.5 Fifth Wave Period (1993-2000)
2.1.6. Sixth Period
2.2 THEORIES OF MERGERS AND ACQUISITIONS
2.2.1 Monopoly Theory
2.2.2 Valuation Theory
2.2.3 Empire-building Theory
2.2.4 Process Theory
2.2.5 Raider theory
2.2.6 Disturbance theory
EMPIRICAL EVIDENCE FOR MERGERS AND ACQUISITIONS
OTHER APPROACHES TO THE STUDY OF MERGERS & ACQUISITIONS
2.4.1 Event Studies Approach
2.4.2 Accounting Data
2.4.3 Stock Market Studies
Stock Price Effects
3.0 UNRESOLVED ISSUES
In today’s market, the main objective of a firm is to make profits and create shareholder wealth. Growth can be achieved by introducing new products and services or by expanding with its present operations on its existing products. Internal growth can be achieved by introducing new products however; external growth can be achieved through mergers and acquisitions...
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