Mergers and Acquisitions

Introduction An important, some would say only, the purpose of a business is to create value for the owners or shargonholders. Businesses, because of the value represented, are often bought and change by other businesses. The combining and/or buying of businesses is an labor all its own called mergers and acquisitions. When two companies find compatible reasons to compounding their businesses and form a single business unit that is called a merger; when one company buys another company that is called an acquisition. This paper will look briefly at the nature and reasons for businesses concourse and acquiring other businesses. Mergers and acquisitions (M&A) generally deal with the battle for bodied controller (Brealey, Myers, & Marcus, 2004, p. 588). Corporate control is exercised by top-level management, hired by the card of directors. The only way to remove these managers is through the board of directors. Often, that means replacing the board and hiring new management. There are essentially four ways to change corporate control: (1) proxy contest, (2) purchase of the company by another (merger or acquisition), (3) leveraged buyout, and (4) divestiture (Brealey et al., 2004, p. 588).

Proxy Contests Proxy contests are campaigns by shareholders to wield bountiful power to cause changes in management by garnering liberal votes of other shareholders to vote a single way. Obtaining legal permit to vote anothers shares is called a proxy. Proxy contests are difficult, unless they have been successful in the past when management or board actions have been perceived to be against the best interests of the shareholders. Shareholders elect the board of directors and shareholders can remove them. Merger or Acquisition When a company recognizes a value in owning another company, it whitethorn negotiate with the target company to merge and create a single company under the control of the initiating company (merger), or the target company may simply be purchased by tendering an... If you want to get a full essay, order it on our website: Ordercustompaper.com

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