Chapter 1
Strategic objective Type of transaction
1 Expanding growing in same industry Horizontal congeneric MBA
Joint venture
strategic alliance
2 Expanding into unrelated
industry Conglometric MYA
Joint venture
strategic alliance
3 Gaining control over the supply chain Vertical MRA
4 Seeking operating h financial synergies Horizontal
vertical
congeneric
Conglomerate MBA
5 Accessing new technologies patents Horizontal
licences skills capabilities vertical
congeneric
Conglomerate MYA
Joint Venture
strategic alliances
6Restructuring an entity's organisational Diversities
structure
7 Restructuring an entity's ownership Equity carve outs
and or capital structure spinoffs
Rights issues
Tracking stocks
share repurchase
leveraged recapitalisation
Leveraged buyouts LBO's
management buyouts MBO's
Exchange offers
Dual class recapitalisation
, Mergers
note the term entity is used as mergers are not restricted to
private public listed companies
note an entity's name often reflects the fact that it came into
existence due to a merger
mergers can be
horizontal vertical conglomerate congeneric
1 Horizontal
merger between rivals operating in the same industry
Why
one dissolves into the other entity
entity
small larger
, 2 Vertical mergers
Merger between companies operating different levels
in a supply chain
Why
As lower levels
of competition in a industry can also disadvantage consumers
by other stakeholders vertical mergers beyond a certain transaction size are also
subject to regulatory approval
3 Conglomerate merger
merger between companies operating in different industries
Why
note its very
difficult to manage widely divergent businesses effectively
a congeneric merger
merger between companies that are 1 not producers of the same product
, 2 not in a supplier producer
distruber relationship
As entities are allied in nature they could already share distribution
channels or use overlapping technologies or production systems
why
note
Acquisitions
Most aquisitions A B A Target
becomes
subsidiary of the aquirer
Regulations are NB_
Types horizontal vertical conglomerate congeneric
1 Friendly aquisitions
The target's board considers the aquisitions offer bid
as fair he agrees that the deal would be
mulally beneficial
The target's board hence calls on shareholders to approve proposal
example Absa Nestle
2 Hostile acquisition
Target's board
Strategic objective Type of transaction
1 Expanding growing in same industry Horizontal congeneric MBA
Joint venture
strategic alliance
2 Expanding into unrelated
industry Conglometric MYA
Joint venture
strategic alliance
3 Gaining control over the supply chain Vertical MRA
4 Seeking operating h financial synergies Horizontal
vertical
congeneric
Conglomerate MBA
5 Accessing new technologies patents Horizontal
licences skills capabilities vertical
congeneric
Conglomerate MYA
Joint Venture
strategic alliances
6Restructuring an entity's organisational Diversities
structure
7 Restructuring an entity's ownership Equity carve outs
and or capital structure spinoffs
Rights issues
Tracking stocks
share repurchase
leveraged recapitalisation
Leveraged buyouts LBO's
management buyouts MBO's
Exchange offers
Dual class recapitalisation
, Mergers
note the term entity is used as mergers are not restricted to
private public listed companies
note an entity's name often reflects the fact that it came into
existence due to a merger
mergers can be
horizontal vertical conglomerate congeneric
1 Horizontal
merger between rivals operating in the same industry
Why
one dissolves into the other entity
entity
small larger
, 2 Vertical mergers
Merger between companies operating different levels
in a supply chain
Why
As lower levels
of competition in a industry can also disadvantage consumers
by other stakeholders vertical mergers beyond a certain transaction size are also
subject to regulatory approval
3 Conglomerate merger
merger between companies operating in different industries
Why
note its very
difficult to manage widely divergent businesses effectively
a congeneric merger
merger between companies that are 1 not producers of the same product
, 2 not in a supplier producer
distruber relationship
As entities are allied in nature they could already share distribution
channels or use overlapping technologies or production systems
why
note
Acquisitions
Most aquisitions A B A Target
becomes
subsidiary of the aquirer
Regulations are NB_
Types horizontal vertical conglomerate congeneric
1 Friendly aquisitions
The target's board considers the aquisitions offer bid
as fair he agrees that the deal would be
mulally beneficial
The target's board hence calls on shareholders to approve proposal
example Absa Nestle
2 Hostile acquisition
Target's board
