Mergers and Acquisition Essay Example | Topics and Well Written Essays - 2500 words

Mergers and Acquisition - Essay ExampleOn the other hand in the level of operation the managers authorize the decisions. So in the real worldly concern the objective and mode of action differ from the theoretically proved ones. So the optimal strategies ingest as sanitary as been driven through the modification. So there atomic number 18 different strategies such as merger, acquisition, research and developments etc are adopted. In this text we will discuss the merger and acquisition policies and their effects through some examples in Europe.In the lexicon of economics the word merger refers to the combination of 2 or more wholes to form a single firm. This takes over all the assets and liabilities of the merging firms offices in the new firm are divided among the shareholders of the certain companies on an agreed basis.On the other hand acquisition refers to the situation when one large firm takes over or better we can say purchase of smaller firms for the sake of expansio n. If these are unorganised the owners agree to the terms. If the other business is a alliance its shares are purchased. Where some, but not all, the shares of other company or companies are purchased, special rules governs the treatment of the existing shareholders those are not willing to sell their share to the purchaser company.Hence we can say that the merger and acquisition are similar as well as dissimilar. In merger the merging companies continue to hold their ownership rights and the right of decision-making regarding the objective of the collaboration. hardly in the case of acquisition the company, the shares of which have been sold, possesses the ownership right no more. Nor the acquired firm possesses the power to make decision. The entire ownership remains in the hand of a single firm.The similarity between the two is that both of the strategies have the same aim. The main objective is the expansion of firm. The level and range of production would increase. These hav e some common benefits, which are given belowEconomies of Scale It