Seminar
1.0 Introduction
The business arena is always evolving. Changes in consumer needs, the economy and business strategies can lead to transformations in how companies look and operate. One way small businesses can work to lower costs or launch new products or services is to merge with another business. Defining a merger can include a number of things. That definition impacts the business structure and how it is viewed by the law.
The Oxford Dictionary of Business describes merger to mean a combination of two or more businesses on an equal footing that results in the creation of a new reporting entity formed from the combining business. The shareholders of the combining entities mutually share the risks and rewards of the new entity and no one party to the merger obtains control over another.
In the other hand, Ghobodian, A.J.P, Liu J & Viney H (1999), say a merger is when two companies integrate to form a new company with shared resources and corporate objective.
Every merger is accompanied by the expectation of a significant impact on the financial performance of the new company. This is normally translated as wanting to realize a value for the newly merged company to be higher than the value of the two merger companies combines together. In essence the derivation of one plus one must equal to three or more, not just two to focus on the main motives of the merger.
According to Gaughan (2002), there are four main motives of mergers:-
As a means for firms to grow quickly.
To experience economic gains as a result of economies of scale or scope
To enlarged access to capital market with lower cost of capital enabling it to enjoy better financial benefits
In anticipation of gains which the merged firm may experience when applying it superior management skills to the target business.
2.0 Company’s Background
Almost 200 years ago, pioneering English planters established rubber plantations in Malaya, most of which were later converted to oil palm. Among those pioneers
The business arena is always evolving. Changes in consumer needs, the economy and business strategies can lead to transformations in how companies look and operate. One way small businesses can work to lower costs or launch new products or services is to merge with another business. Defining a merger can include a number of things. That definition impacts the business structure and how it is viewed by the law.
The Oxford Dictionary of Business describes merger to mean a combination of two or more businesses on an equal footing that results in the creation of a new reporting entity formed from the combining business. The shareholders of the combining entities mutually share the risks and rewards of the new entity and no one party to the merger obtains control over another.
In the other hand, Ghobodian, A.J.P, Liu J & Viney H (1999), say a merger is when two companies integrate to form a new company with shared resources and corporate objective.
Every merger is accompanied by the expectation of a significant impact on the financial performance of the new company. This is normally translated as wanting to realize a value for the newly merged company to be higher than the value of the two merger companies combines together. In essence the derivation of one plus one must equal to three or more, not just two to focus on the main motives of the merger.
According to Gaughan (2002), there are four main motives of mergers:-
As a means for firms to grow quickly.
To experience economic gains as a result of economies of scale or scope
To enlarged access to capital market with lower cost of capital enabling it to enjoy better financial benefits
In anticipation of gains which the merged firm may experience when applying it superior management skills to the target business.
2.0 Company’s Background
Almost 200 years ago, pioneering English planters established rubber plantations in Malaya, most of which were later converted to oil palm. Among those pioneers
References: Brealey, R. A , Myers, S. C and Allen, F. (2008). Principles of Corporate Finance. (9th ed.). McGraw Hill. Prasanna Chandra. (2010). Fundamentals of Financial Management. (5th ed.). New Delhi. McGraw Hill. Retrieved August 01, 2014, from http://www.simedarby.com/History.aspx Retrieved August 01, 2014, from http://www.simedarbyplantation.com/ Retrieved August 01, 2014, from http://www.simedarbyindustrial.com/ Retrieved August 01, 2014, from http://www.simedarbymotors.com/ Retrieved August 01, 2014, from http://www.simedarbyproperty.com/ Retrieved August 01, 2014, from http://www.simedarbyenergyutilities.com/ Retrieved August 01, 2014, from http://en.wikipedia.org/wiki/Sime_Darby Retrieved August 01, 2014, from http://www.simedarby.com/Sime_Darby_Berhad_Registers_Record_Earnings_Post-Merger.aspx