MergeringJoin now to read essay MergeringMERGERINGDirectors EnquiryA merger is the combination of two or more entities into one through a purchase or a pooling of interest. The process by which a corporation obtains control over a complete strategic business unit (SBU) or competence may be described as being by acquisition, merger or take-over. A merger is the coming together of 2 organisations, often of a broadly similar size. An acquisition is the purchase of one company by another, with the acquirer usually considerably larger than the company acquired. A take-over on the other hand is a hostile acquisition this takeover process where the directors of the target company do not wish their firm to be acquired. In the past two decades, merges and acquisitions have been the examples of the most dramatic corporate growth and expansion. In recent years, there has been an expansion in the number of mergers between large corporations these have been caused by a number of reasons, which include globalisation, deregulation, and increased competition in the markets. Through a merger, two organisations come together to share resources and achieve a common goal for the future. Through the process of the merger, two economic units are combined to form a much larger and stronger entity.
The increased competition, which results from globalisation, is one reason for the increased globalisation and consolidation. Given the increasingly international environment in which organizations compete, a multinational merger instantly opens a company up to a worldwide market, cross border knowledge transfer channels, international skill, and a wider consumer market. Firms feel to keep up with the industry and remain a key competitor they have to follow the trend. The increased competition is one reason, which has led to an increase in the merger activity (Fine, 2002). Through mergers, a company can increase its investment in skills and expertise by channelling in the resources of two companies. Mergers lead to increased operational efficiencies and organisations can increase their capabilities by combining their research facilities. Also through creating a merger a company can increase shareholder wealth, when a firm enters into a merger it increases its assets, knowledge, expertise and skills. A company can increase its profitability by increasing its industry concentration and generate oligopolistic profits. (Lundan et al, 2001) some organisations increase their shareholder wealth through merges by increasing the scope of their activities and geographical presence.
There are two types of growth for a firm these include vertical diversification and horizontal diversification. Vertical diversification is enlarging the organisations capabilities by undertaking operations in a different competitive arena in the same value chain the company is operating. Horizontal diversification is one where operations in a different competitive arena in the same value chain but not in the same industry the company are operating. Horizontal diversification, when a firm moves into providing offers that complement its current offers. Through such an activity, the revenues of a company can be increased through consolidation of two firms assets. Through vertical integration, a company can improve its operations by controlling elements in its value chain (Grants, 2003).
Dividend Analysis – What Is A Strong Business?
Dividend research is a process whereby a financial institution reviews equity data to determine what will achieve a profitable year, when the value of assets will be greater and with what maturity. This process is known as a dividend. It is not known whether a dividend is achieved through a stock market or through other financial channels. However, dividend research has traditionally been utilized by the public because it provides financial information in the form of the return on capital (ROIC) and returns as a percentage of cash. It is often considered as the method to understand how investments can be made and, sometimes, the potential for a company to be profitable. The financial industry, even though it is relatively new, has used dividend research in the past to measure the value of financial vehicles that have a strong ROIC. What has been shown is that if a company provides a long-term product with a dividend, it has a very good chance of success. If, on its return to shareholders, it is able to do so, the company’s annual returns in earnings could be higher. More importantly, if it gets around to taking a share of the dividend, it has a very good chance of earning substantial returns. It is important to differentiate a business in order to distinguish itself from other firms and from other markets. The goal of dividend research has been to identify the strengths of financial services companies and identify the companies with significant market potential for growth that could result from such a shift. The objective of research that is conducted over multiple years can be thought of as one company having long lasting benefits. If certain financial asset class of companies are used at different times, it is possible to create a strong relationship with the market and become better positioned to attract new investors. However, there is a large potential for volatility in the value of these asset classes. If, on its return to shareholders, it is able to do so, then, with the same risk a company could be doing business, then the company has a very strong chance of getting a dividend. Some analysts have even suggested that stock market investors should move from conventional companies to alternative financial services businesses. For the same reason, a company can become very difficult to find a new investor quickly and is less attractive to the long-term holders of long-term securities. This is because stocks can only be bought and sold at the peak of a business’s value chain (Grants, 2001). As a result, there is a small chance that such a company might become a financial disaster. Another drawback of dividend research is that unlike stock market analysts, it is also difficult to track the value of a firm’s business and to make any decisions concerning its management. However, the benefits of dividend research, in other words, are much appreciated and companies start to look for potential partners in the company when they are prepared for some of the risks that it presents. In the event of major loss, there may be the option of buying a new company or a share of the company’s debt. Therefore, even with equity research, as part of a company’s investment strategy, an investment strategy that could be risky will often lead the company to lose money, lose out on its growth opportunities or experience certain unexpected business events.
Dividend Analysis – What Is A Strong Business?
Dividend research is a process whereby a financial institution reviews equity data to determine what will achieve a profitable year, when the value of assets will be greater and with what maturity. This process is known as a dividend. It is not known whether a dividend is achieved through a stock market or through other financial channels. However, dividend research has traditionally been utilized by the public because it provides financial information in the form of the return on capital (ROIC) and returns as a percentage of cash. It is often considered as the method to understand how investments can be made and, sometimes, the potential for a company to be profitable. The financial industry, even though it is relatively new, has used dividend research in the past to measure the value of financial vehicles that have a strong ROIC. What has been shown is that if a company provides a long-term product with a dividend, it has a very good chance of success. If, on its return to shareholders, it is able to do so, the company’s annual returns in earnings could be higher. More importantly, if it gets around to taking a share of the dividend, it has a very good chance of earning substantial returns. It is important to differentiate a business in order to distinguish itself from other firms and from other markets. The goal of dividend research has been to identify the strengths of financial services companies and identify the companies with significant market potential for growth that could result from such a shift. The objective of research that is conducted over multiple years can be thought of as one company having long lasting benefits. If certain financial asset class of companies are used at different times, it is possible to create a strong relationship with the market and become better positioned to attract new investors. However, there is a large potential for volatility in the value of these asset classes. If, on its return to shareholders, it is able to do so, then, with the same risk a company could be doing business, then the company has a very strong chance of getting a dividend. Some analysts have even suggested that stock market investors should move from conventional companies to alternative financial services businesses. For the same reason, a company can become very difficult to find a new investor quickly and is less attractive to the long-term holders of long-term securities. This is because stocks can only be bought and sold at the peak of a business’s value chain (Grants, 2001). As a result, there is a small chance that such a company might become a financial disaster. Another drawback of dividend research is that unlike stock market analysts, it is also difficult to track the value of a firm’s business and to make any decisions concerning its management. However, the benefits of dividend research, in other words, are much appreciated and companies start to look for potential partners in the company when they are prepared for some of the risks that it presents. In the event of major loss, there may be the option of buying a new company or a share of the company’s debt. Therefore, even with equity research, as part of a company’s investment strategy, an investment strategy that could be risky will often lead the company to lose money, lose out on its growth opportunities or experience certain unexpected business events.
1.0 Introduction.This project will focus on GlaxoSmithKline plc one of the worlds largest pharmaceutical companies. The report analyses the reasons behind multinational mergers with particular reference to GSK plc. This research examines the theoretical reasons for the pharmaceutical merger can be realised in practical situations such as that of GSK