Mergers and Acquisitions

Term Paper # 96203

Accounting > Financial
Accounting > Managerial
Business > Accounting
Business > Management

An analysis of the benefits and risks associated with international mergers and acquisitions.

1,198 words () | 3 sources | MLA | 2007 United States

Paper Summary:

This paper assess the impact of mergers and acquisitions on businesses, including "sensible" and "dubious" reasons for, and benefits and costs of, cash and stock transactions. The paper includes an examination of the financial risks of merging with or acquiring an organization in another country. It then discusses how the risks associated with merging can be mitigated.

Table of Contents:
Abstract
Mergers and Acquisitions
Reasons for Mergers and Acquisitions
Benefits and Costs
Financials Risks and Mitigating the Risks
Conclusion

From the Paper:

"The costs associated with mergers and acquisitions lies with the risk of failure. Failed mergers and acquisitions occur when managers are unable to combine critical processing functions of the two companies. Mergers and acquisitions will result in unforeseen costs if the company does not properly estimate the cost of inventory and equipment. Additional costs occur when companies underestimate the costs of renovation expenses."
"Sometimes companies with few prospects for investments but with a surplus of cash, look to mergers as a way to deploy or invest the excess cash. Whether mergers or acquisitions occur vertically, horizontally or as a conglomerate, the potential benefits include expansion of sales territory and customers, combining complementary resources, improving synergies via shared operational efficiency and enhanced profitability to the organization and shareholders."

Sample of Sources Used:

Albrecht, W.S., Stice, J.D., Stice, E.K, Swain, M.R. (2005). Accounting: Concepts and Application p. 15-810. The Thomson South-Western Corporation 9e.
Brealey, R.A., Myers, S.C., & Marcus, A.J. (2003). Fundamentals of Corporate Finance p.585-680. The McGraw Hill Companies, Inc. 4e.
Mollenkamp, C. (2006, Nov. 9). The Asian Wall Street Journal: Lechman adds heft in Europe p.22. Sourced from the ProQuest database November 12, 2006.