Fin622 GDB No. 3 solution
Friday, July 01, 2011 Posted In Fin Edit ThisSemester “Spring 2011”
“Corporate Finance (Fin622)”
This is to inform that Graded Discussion Board (GDB # 03)
will be opened according to the following schedule
Schedule
Opening Date and Time
June 30, 2011 At 12:00 A.M. (Mid-Night)
Closing Date and Time
July 04, 2011 At 11:59 P.M. (Mid-Night)
Topic/Area for Discussion
“ Mergers & Acquisitions ”
Note: The discussion question will be from the area/topic mentioned above. So start learning about the topic now.
“Corporate Finance (Fin622)”
This is to inform that Graded Discussion Board (GDB # 03)
will be opened according to the following schedule
Schedule
Opening Date and Time
June 30, 2011 At 12:00 A.M. (Mid-Night)
Closing Date and Time
July 04, 2011 At 11:59 P.M. (Mid-Night)
Topic/Area for Discussion
“ Mergers & Acquisitions ”
Note: The discussion question will be from the area/topic mentioned above. So start learning about the topic now.
Identify the type of merger in each of the following cases:
Case 1: (Conglomerate Merger)
Case 2: (Congeneric Merger)
Case 3: (Horizontal Merger)
Case 4: (Horizontal Merger)
Case 1: (Conglomerate Merger)
Case 2: (Congeneric Merger)
Case 3: (Horizontal Merger)
Case 4: (Horizontal Merger)
......................
SOLUTION:
Case 1 = Conglomeration
Case 2 = Product-extension merger
Case 3 = Market-extension merger
Case 4 = Horizontal merger
Conglomeration - Two companies that have no common business areas.
Product-extension merger - Two companies selling different but related products in the same market.
Market-extension merger - Two companies that sell the same products in different markets.
Horizontal merger - Two companies that are in direct competition and share the same product lines and markets.
:::::::::::::::::::::::::::::::::::::::::
Case 2 is VERTICAL MERGER
:::::::::::::::::::::::::::::::::::::::::::
1-Conglomeration
2-Vertical Merger
3-Market-extension Merger
4-Horizontal Merger
:::::::::::::::::::::::::
2nd Is Vertical Because this type of merger involves a customer and a company or a supplier and a company merging. Imagine a baseball bat company merging with a wood production company. This would be an example of the supplier merging with the producer and is the essence of vertical mergers.
::::::::::::::::::::::::::::::::
Case 1 = Conglomeration
Case 2 = Product-extension merger
Case 3 = Market-extension merger
Case 4 = Horizontal merger
Conglomeration - Two companies that have no common business areas.
Product-extension merger - Two companies selling different but related products in the same
Market-extension merger - Two companies that sell the same products in different markets.
Horizontal merger - Two companies that are in direct competition and share the same product lines and markets.
::::::::::::::::::::::::::::::::::::::::::::::::::::
Case 1 = Product-extension merger / Conglomeration
Case 2 = Vertical merger
Case 3 = Purchase Mergers
Case 4 = Horizontal merge
Case 1 = Conglomeration
Case 2 = Product-extension merger
Case 3 = Market-extension merger
Case 4 = Horizontal merger
Conglomeration - Two companies that have no common business areas.
Product-extension merger - Two companies selling different but related products in the same market.
Market-extension merger - Two companies that sell the same products in different markets.
Horizontal merger - Two companies that are in direct competition and share the same product lines and markets.
:::::::::::::::::::::::::::::::::::::::::
Case 2 is VERTICAL MERGER
:::::::::::::::::::::::::::::::::::::::::::
1-Conglomeration
2-Vertical Merger
3-Market-extension Merger
4-Horizontal Merger
:::::::::::::::::::::::::
2nd Is Vertical Because this type of merger involves a customer and a company or a supplier and a company merging. Imagine a baseball bat company merging with a wood production company. This would be an example of the supplier merging with the producer and is the essence of vertical mergers.
::::::::::::::::::::::::::::::::
Case 1 = Conglomeration
Case 2 = Product-extension merger
Case 3 = Market-extension merger
Case 4 = Horizontal merger
Conglomeration - Two companies that have no common business areas.
Product-extension merger - Two companies selling different but related products in the same
Market-extension merger - Two companies that sell the same products in different markets.
Horizontal merger - Two companies that are in direct competition and share the same product lines and markets.
::::::::::::::::::::::::::::::::::::::::::::::::::::
Case 1 = Product-extension merger / Conglomeration
Case 2 = Vertical merger
Case 3 = Purchase Mergers
Case 4 = Horizontal merge
