Mergers and Acquisitions Paper Research Example | Topics and Well Written Essays - 1500 words

Mergers and Acquisitions - Research Paper Example By this process, the merging companies aim to enhance their long term profitability by expanding their operations. In contrast, acquisitions occur between the bidding company and the target company and it may be either hostile or friendly. Under acquisition, often it is seen that bidding company purchases the assets of the target company. There are several types of M&A and the mode is chosen according to the nature, market position, and requirements of concerned companies. This paper will examine five types of M&A such as horizontal, vertical, congeneric, conglomerate and spin-offs using recent examples. 1. Horizontal M&A In the case of a horizontal M&A, two competing companies merge together so as to take advantage of its same product lines and markets. This strategy reinforces the market position of the integrated firm since the large scale production considerably minimizes the cost of production and thereby increases the profitability. It is precise that the large scale operations will certainly increase the market reputation of the integrated firm which would in turn enable the firm to negotiate successfully with its suppliers and buyers. In the opinion of Frensch (2007), a horizontal M&A aids the integrated firm to divide the labor among different large organizational units effectively. Merger between Daimler- Benz of Germany and Chrysler Corporation of United States is a good example for horizontal mergers. 2. Vertical M&A Zain (2008) states that a ‘customer-company or company-supplier relationship’ is reflected when two companies are merged under vertical M&A concept. Scholars opine that vertical M&A mitigates market uncertainties and thereby promotes decrease in transaction costs. According to Buhner (as cited in Frensch, 2007, p. 46), these transaction cost may include search and information cost, contract conclusion cost, quality control cost, and administration and taxation costs Amalgamation of Apple with Intel can be termed as a vertic al merger. 3. Congeneric M&A Congeneric M&A is a merging strategy where two companies in the same or related industries offering different product lines merge together. In other words, these companies would not have common customer or buyer. Under congeneric M&A, it is observed that the merging companies may share similar distribution channels. A well popularized congeneric merger is Citigroup’s acquisition of Travelers’ Insurance. 4. Conglomerate M&A A conglomerate M&A refers to the merger of two organizations that are engaged in totally unrelated business operations. In most cases, the merging companies would be operating in different geographical areas. It is a best available strategy for extending business territories and extending product ranges. However, it is noted that conglomerate mergers occurs rarely as a result of strategic failures. It has been identified that Kelso’s acquisition of Nortek was a conglomerate merger. 5. Spin-offs Under this technique , an existing business division of a parent company distributes new shares so as to create an independent company. It can be reflected as a type of divestiture. Business houses wishing to reshape their structure often sell less productive businesses as spin-offs. Factors leading to M&A activities From the above discussion, it is easy to analyze the benefits of different mergers and acquisition strategies. It is found that severe competition is the major reason that often causes amalgamation

The Pocatello Prison Siting Story Essay Example | Topics and Well Written Essays - 1250 words - 1

The Pocatello Prison Siting Story - Essay Example There are certain challenges attached to building a new prison. While there are economic issues to consider, there are political complications that also may cause hindrance in selecting an area as a potential site for a prison. One major problem that has taken severe shape in the United States is overcrowding in state’s prisons. That excessive number of prisoners incarcerated every year is reflected in the fact that although America consists of only 5 percent of the global population, the country’s total number of prisoners is about 25 percent of prisoners around the world (The Challenges of â€Å"realignment†, 2012). This results in huge demand for building more prisons which leads to greedy bargaining of prison-guards union. Therefore, it is not surprising that state prisons have been exerting an enormous pressure on the state budget. Moreover, growing number of prisons in rural areas or small towns has also become a matter of humanitarian concern. Since most prisons in the United States are overcrowded, heath issues have taken a serious form. However, misery of the prisoners is always a subtle issue for the mainstream population in America as majority of state prisons is situated in remote locations from cities, often in deserts area inland which are dusty. Even till a few years back, one acute problem occurred in the manner that double the number of prisoners were housed in a prison than is actually permitted, especially in the city of California. To deal with this crisis, in 2011 the U.S. Supreme Court ruled that prisons should hold only that number of prisoners which will allow to sufficiently maintain humane conditions (The Challenges of â€Å"realignment†, 2012). The case study of the siting of the Pocatello Prison is one example that reflects the many ramifications (both political and rational) that arose from the decision of building a new women’s prison by the state of Idaho. For many