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Merger and Acquisition Strategy

A corporation can grow internally by expanding its operations both globally and domestically, or it can grow externally through mergers, acquisitions and strategic alliances. A merger is a transaction involving two or more corporations in which stock is exchanged, but from which only one corporation survives. Mergers usually occur between firms of somewhat similar size and are usually “friendly.” The resulting firm is likely to have a name derived from its composite firms. For example Sony Corporation and LM Ericsson have merged their mobile phone divisions in an effort to revitalize their struggling handset businesses. The new company “Sony Ericsson Mobile Communications” is a 50-50 partnership located in London, England, employing about 3,500 people worldwide. An acquisition is the purchase of a company that is completely absorbed as an operating subsidiary or division of the acquiring corporation. Examples are Procter & Gamble’s acquisition of Richardson – Vicks, known for its Oil of Olay and Vidal Sassoon brands, and Noxell Corporation, known for Noxzema and Cover Girl. Acquisitions usually occur between firms of different sizes and can be either friendly or hostile. Hostile acquisitions are often


- Define the management capabilities for acquisition strategy implementation and post-acquisition integration.

Whether we are talking about executive egos or valuable employees, proactive outreach can help the acquiring company cultivate "champions" for the acquisition among key managers and executives within the candidate company, making the entire process a win-win situation for all parties involved.

It has been estimated that most companies spend only about $10 per employee per year on internal communications, less than is spent on many corporate Christmas parties. However, when an employee leaves a company, businesses spend an average of $8,300 per employee in replacement costs. When one considers the additional costs to a business of unhappy employees who are unproductive, poor internal communications can be a substantial expense for a business.

Just because the company is for sale and we can afford it are not good enough reasons to do a deal.

- Conduct broad search for candidates (In case the targets have not been previously identified).

- Leveraging existing infrastructure

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Approximate Word count = 4213
Approximate Pages = 17 (250 words per page double spaced)


  

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