...is a privately held business and wants to expand its operations. The business is considering three options for moving forward with the expansion plan. The first option is going public with an IPO, or Initial Public Offering. The second option is to acquire another similar business within the industry, and finally the third option is merging with another organization. All three of these options are viable choices and this paper analyzes each options for its viability and suitability to needs of the business. The paper identifies the strengths and weaknesses of the each approach, and well as the opportunities and threats posed by each option. The analysis begins with the strengths of the IPO, merger, and acquisition. Strengths of an IPO, Merger, or Acquisition Berry’s Bug Blasters could effectively expand its organization very rapidly through an initial public offering (IPO). An IPO would position the organization, after an underwriting process, to go from a privately owned company with modest annual revenues of $3.2 million to a public company that could put Berry’s on the Bug map. The strength of an IPO for Berry’s Bug Blasters would be in the cash generated by selling shares to the public. This additional capital could help the organization to expand into new territories; more readily compete within its industry, and even become a household name. A listing on a major stock exchange such as the NYSE would boost Berry’s exposure giving the company...
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...Human Resources role in Merger and Acquisitions Whether your small business is the purchaser or the target company in a merger or acquisition, your human resources department as well as the human resources workers in the other company play a vital role in the process. Human resources help manage any problems or challenges related to people in the organizations as the merger or acquisition process unfolds. Company Culture Human resources help determine if the cultures of the two companies that are becoming one through a merger or acquisition are compatible. Human resources must have a firm grasp on the culture of the company for which they work and must study the culture of the other organization to make such a determination. Cultural differences may include how the two organizations define and measure success within the organization; benefits employees enjoy, such as personal time and insurance; how problems within the organization are handled; the management styles of the two organizations; and the overall attitude of the employees and managers toward business functions and the industry in which they work. Benefits Problems During the due diligence portion of a merger or acquisition, which comes after the purchasing company makes its initial offer to purchase the other company, management from the purchasing company assess whether the deal makes strategic and financial sense. Human resources from the purchasing company specifically assess the benefits structure...
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...The acquisition method was the accounting method used to account for acquisitions before 2009. In the acquisition method, there are two methods of accounting – acquisition accounting and merger accounting. The acquisition has to be valued at fair value and the difference between the purchase price and fair value has to be recognized as goodwill. Purchase method also has certain features similar to those of merger accounting. This method helps in having a uniform mode of accounting for expenditures related with purchase. One of the main differences between purchase method and acquisition method is that the purchase method has a more discretionary purchase- price allocation mode. Alternatively, the acquisition method is market driven. The acquisition method requires the business combinations to be reflected at full fair value. It also includes noncontrolling interests and contingencies, which may not be seen in the purchase method. The acquisition method generates a more accurate representation of intangible assets, which makes the financial statements more transparent and more significant. When using the purchase method, the company that makes the purchase only considers the other company as an investment. The amount paid for the purchase could be higher than the fair market value of the company bought. This is the same with acquisition method, where a company buys another for expanding its own business. Figure 1 is a graph of the minority interest in net income and the total...
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...Team owners pay more to keep athletes on the team to be on a winning streak, but whether the drive to win is justifiable remains in doubt. The economic system involving sports, corporate America, and the media is an interdependent one. Athletes make huge sums of money paid to them by owners who make even larger sums of money. Agents, free agency, and other phenomena keep athlete salaries rising. So, too, does increased ticket sales to games, increased TV viewership, enormous media contracts, TV advertising, and corporate sponsorship and endorsement deals. The economic rewards in the sports industry are so enormous that corporate America, the media, and sports franchises are driven to earn a larger slice of the profit pie. Mergers and acquisitions, alliances, cross-promotion, enormous advertising expenditures, staggering media contracts, and a host of other phenomena are used as a means of retaining competitive advantage among...
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...Mergers and acquisitions – Amoco Highlights Transaction summary Merger of Amoco into a newly formed BP first-tier US subsidiary Amoco shareholders receive BP plc ordinary shares as ADRs Unified global management team US and UK GAAP results presented using merger accounting or on a "pooling of interest" basis US$-denominated group financials and dividends Transaction recommended by both Boards Effective: December 31, 1998 Transaction overview Transaction description UK Holding Company Structure Amoco shareholders exchanged their shares in Amoco for ADRs representing shares in BP Accounting/reporting Accounted for as a merger under UK GAAP (or "pooling" under US GAAP) BP to report in US dollars, under UK GAAP with supplementary US GAAP information provided Dividends Dividends to be declared in dollars, with a sterling alternative to be offered to all UK shareholders of BP who require Sterling Listing/index BP Amoco remains in the FTSE 100 index FTSE weighting increased The following material contains statements, particularly those regarding capital employed, capital expenditure, cashflows, costs, savings, debt, demand, disposals, dividends, earnings, efficiency, gearing, growth, margins, performance, prices, production, productivity, profits, reserves, returns, sales, strategy, synergies, tax rates, trends, value, volumes, and the effects of BP merger and acquisition activity, which are or may be forward looking statements that involve risk and uncertainty...
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...We want a dinosaur that would fly.” Those were the words of a senior Reliance Industries (RIL) director addressing a group of presspersons visiting the company’s refinery in March 2006. “In terms of size,” he hastened to add, lest “dinosaur” be read to mean something else. The occasion was the IPO of the re-born Reliance Petroleum (RPL). Reliance moves to merge Petroleum with itself Three years hence and with RPLs new 29-million-tonne refinery commissioned, a dinosaur is indeed in the making through the merger of Reliance Petroleum (RPL) and RIL. The combined entity will boast a refining capacity of 62 million tonnes (1.24 million barrels a day) and status as India’s largest company in terms of revenue and earnings. DéjÀ vu The proposed merger fits in perfectly with the style perfected by the Reliance group in the last three decades and it is a feeling of déjÀ vu for those following the company and its fortunes. The Reliance Industries we now know is an amalgam of several companies that were floated for executing specific projects and then merged with the parent. Thus, you had Reliance Petrochemicals Ltd., Reliance Polyethylene Ltd. and Reliance Polypropylene Ltd., all of which were floated to execute specific petrochemical projects in Hazira in the late 1980s and early 1990s but later merged with Reliance Industries. RPL merger inevitable and expected: Experts The original Reliance Petroleum, which made its IPO in 1993, was merged with Reliance Industries in...
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...Rock MBA 465 Strategic Management BSA 555 November 1, 2011 David R. Gray, Ph.D 1. Why are acquisition strategies popular in many firms competing in the global economy? Because of globalization; deregulation of multiple industries in many different economies and favorable legislation; the number and size of domestic and cross-border acquisitions continues to increase; especially from emerging economies 2. What reasons account for firms’ decisions to use acquisition strategies as a means to achieving strategic competitiveness? To increase market power; overcome entry barriers to new markets or regions; avoid costs of developing new products and increase the speed of new market entries; reduce the risk of entering a new business; become more diversified; reshape their competitive scope with different portfolio of businesses; and enhance their learning. 3. What are the seven primary problems that affect a firm’s efforts to successfully use an acquisition strategy? Difficulty of effectively integrating the firms involved; incorrectly evaluating the target firm’s value; creating debt loads that preclude adequate long-term investment; overestimating the potential for synergy; creating a firm that is too diversified; creating an internal environment in which managers devote increasing amounts of their time and energy to analyzing and completing the acquisition; developing a combined firm that is too large (thereby necessitating extensive use of bureaucratic, rather...
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...C O V E R S T O R I E S R O U N D TA B L E C O M M E N TA R Y Transatlantic Divergence in GE/Honeywell: Causes and Lessons BY DONNA E. PATTERSON AND CARL SHAPIRO welcome, even when they are predicted to cause leading firms to gain market share. Second, the procedures in place in Europe contributed to the ability of the Competition Commissioner to block the proposed merger of GE and Honeywell based on dubious economic grounds and very weak evidence. In particular, the absence of timely and independent judicial review of the Commissioner’s decision that a combination is incompatible with the Common Market gives enormous discretion to the Competition Commissioner and to the Commission’s Merger Task Force. We discuss below how the interplay of these two trans-Atlantic differences led to the divergent results in GE/Honeywell. The EU’s Conglomerate Case A key driver of the proposed merger was the desire of GE and Honeywell to combine their complementary product lines in the civil aerospace industry.2 GE makes, sells, and services large aircraft engines. Honeywell, itself the result of a 1999 merger between Allied Signal and Honeywell, makes small aircraft engines, various avionics components, and other “non-avionics” components, such as environmental control systems, wheels and brakes, and auxiliary power units. At its heart, the merger was neither horizontal nor vertical, but conglomerate. In fact, the GE/Honeywell merger was remarkably “clean” in terms of horizontal...
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...When a heart breaks When a heart breaks It won't go quietly It screams about your past mistakes Which isn't very lovely I guess I can understand It was once a vibrant being But it took more than it could withstand Without a chance of fleeing Now it lays in a shattered mess At the foot of my bed The pain never hurting any less But I know I must move ahead I know when a heart breaks It may never mend But it always gives and never takes So now I know this is the end Expressing How I Feel It's been a long time now we have been talking on the internet, And my love is growing each day although we have never met. Words can't truly express how I feel about you, You know my love is authentic, you have seen some clues. I was sad and searching for a mate like a lonely dove, And then you came along to bless me with your divine love. And although baby, we are miles apart, Not a day goes by without you in my thoughts. Sure online I have met a lot of girls, But trust me, you are the only girl for me in this world. We are so compatible for each other, I could never feel this emotion again for another. I can't wait for that day when you are really mines, I know it will be soon, just in a matter of time. If loving you is a sin, then I am the devil, Right now my love for you, is at the highest level. Ketika jantung istirahat Ketika jantung istirahat Ini tidak akan pergi diam-diam Ini jeritan tentang kesalahan...
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...RUNNING HEAD: Unit 4 assignment Unit 4 assignment Jeremy Donaldson IT: 402 Kaplan University November 12, 2012 Well whenever you happen to engage into a situation when the merger and the acquisition project, pertains to the price customer loyalty program, giving by the national and regional chain agreeing to the same price is a very tough decision. The IT application will be the main thing that will play a huge part, and seeing if the customers will stay loyal or transfer to the other company. Even though the national chain supports that the two prices will highly expensive, if the regional chain wants to implement small companies like markets or stores, with sales drop the customer loyalty program can easily be abandon. The main key here would be to focus more on the customers rather than the other things they may get into the way. The article shows that discounts can have a huge value for winning customers, because everybody loves saving money. (Butcher, 1998) In today’s industry, every company has some sort of plan or scheme to draw their customers to them. For example, you have companies that will lower prices, offer discounts and even contracts and long term agreements. (Butcher, 1998) The main objective of the program is to offer the customers joy by rewarding them as much as possible to keep their attention directed to the company. According to the Porter’s Five Forces, This will definitely weaken the power of the buyers, in other words the customers...
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...or genetically determined? The process of language acquisition begins in the first months of life and continues throughout adulthood. To explain the human ability for language acquisition has been offered two completely different theories. One theory, which was formulated by B.F. Skinner, assumes that language acquisition as a result of nurture and environmental influence, another theory, which was proposed by Noam Chomsky, claims that learning the language is almost entirely provided by innate ability. Therefore, this essay aims to compare and contrast these two theories for their values and problems. Skinner applied to the development of the language his theory of operant conditioning, and according to his view, verbal behavior, like any other, arises as a consequence of operant learning. He argues that adults play an important role in language acquisition, by reinforcing and speaking to children grammatical way they control their expressions and utterances. Due to the reinforcement children establish the relationship between stimulus and response. However, problematic with this theory is that children often ignore the corrections. In addition, parents generally imitate the child's speech, and do not correct them. They are more interested in what child want to say, but not in sentences structure which he used. On the other hand, Chomsky (1959), who was a nativist, argued that children are born with a language acquisition device (LAD) and suggest The Innateness Hypothesis...
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...Company Background In 1979 Garth Drabinsky and Nathan Taylor formed Cineplex. From early on Cineplex saw itself as a niche player. They used small screens to show specialty movies and they employed this strategy not to challenge major chains, but to compliment them. Cineplex did well primarily because of their concept for carefully planned use of shared facilities. With this success they began to expand across Canada with a very rapid rate of expansion. During this expansion however they amassed a 21 million-dollar debt. Also, distributors became reluctant to supply Cineplex for fear of alienating the two largest Canadian chains. In 1983 to avoid bankruptcy, Cineplex reduced its debt by selling off some of its recently purchased assets. Darbinsky also took legal action to win back access to major releases. Son after this time he also purchased the Odeon chain so that he would be able to bid for early runs of movies. This gave Cineplex a major position in the industry. Through Darthbinsky’s relentless tactics Cineplex Odeon was the second largest motion picture chain with 1,800 screens in over 500 locations. Now that Darthinsky owned one of North America’s major theater chains he sought to change the movie going experience by changing the layout and atmosphere of the theaters to attract even more moviegoers. Drabinsky endeavored to use the size of his chain to obtain added clout with film studious and distributors. Drabinsky had no plans to slow his companies’ rapid pace of expansion...
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...TO: Mr. Jones, Client FROM: Tax Professional DATE: June 12, 2011 SUBJECT: Tax Advice Several organization options were presented. Each option is presented below with the most optimal course of action, from a tax perspective. Each option has various tax benefits and drawbacks. The options will be evaluated independently. The option of outright purchase of Smithon will be evaluated first, followed by the options of merging or acquiring Smithon. 1a.) Should Mr. Jones purchase the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith company – would that raise debt to equity issues? Purchasing the stock of Smithon outright, leaving it intact, would qualify as a Type B reorganization. Johnson Services would transfer some of their voting stock to the Smithon shareholders. Johnson Services would be required to have at least 80 percent of the total combined voting power and 80 percent of each class of nonvoting stock. (Rev. Rul. 59-259, 1959-2 CB 115). As to Mr. Jones’ question about issuing debt, there are advantages to issuing debt to raise funds. The interest payments are deductible to the corporation. However, the IRS may reclassify debt instruments as equity, using the doctrine of substance over form. There are five factors that may be considered when evaluating debt or equity classifications: 1) Does the instrument contain an unconditional promise to pay on demand or on a specified...
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...subsidiaries. Through such activities, organizations can extend their core capabilities into new lines of business, expand their existing lines of business into new geographic areas, and improve the efficiency of existing businesses. Firms acquire, create, or merge with other organizations in order to improve the profitability of the overall corporation. The track record of corporate strategies, however, is not nearly as satisfying as its objectives. According to the best insights of research and practice, most mergers and acquisitions fail even to recover their costs. Hundreds of billions of dollars, against a base of a few trillion invested every year, are lost to poorly conceived or poorly executed corporate investments. For more than three decades, investors have routinely and systematically discounted the market value of acquiring or merging firms; nearly all gains in market value have gone to acquired firms, pre-merger or acquisition. This course is designed to introduce you to the central challenge of corporate strategy, which is the creation of a corporate advantage through investments in a set of businesses that are better off, individually or collectively, for being commonly owned. The goal is to deepen your understanding of the challenges involved in major corporate investments and to improve your ability to identify and execute strategically significant investments in new lines of business. Three main questions will guide our study: (1) What factors...
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...Virtual Organization Strategy for Kudler Fine Foods For many organizations, strategic decisions play an important role in how the organization plans to expand its business and its profits. There are many factors management must consider before making a final decision as to which approach will provide the most benefits as well as bringing in the most capital. Each approach considered will present strengths, weaknesses, opportunities, and risks that management must carefully consider. Each approach will also have an impact on the organization’s decision should they decide to pursue an international location. The decisions management faces are not easy ones and they must carefully determine the best strategic approach or run the risk of financial ruin. Kudler Fine Foods Kudler Fine Foods is one such organization looking to expand its operations. Currently, Kudler Fine Foods owns and operates three stores all based in the San Diego, California area. Kudler Fine Foods, an upscale specialty foods store offering domestic and foreign foods as well as spirits to its customers, began in mid-1998 and within nine months was already making a profit. Kudler Fine Foods opened two additional stores, one in 2000 and one in 2003 (Apollo Group, 2011). Because business has been so good, management is looking at another possible expansion and is seriously considering the options available. In order to make the most beneficial as well as profitable decision, management must take its time and...
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