Merger and acquisition

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Operations Management at Sephora

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FERRERO

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UTSC Department of Management

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Merger and acquisition

defenitions

an acquisition (or takeover) is when a larger company buys a smaller one, and the smaller company may not be hаppy because its identity will be lost.

A merger is when two companies join together as equals to form one, and the process is mutually consensual

After the acquisition has happened, success is by no means certain.

The second – is poor implementation reorganization, new job descriptions, unfamiliarity with the customers and markets of the other company

it all will all lead to a period of confusion, and any expected cost savings may not materialize.

The first problem is cultural

the two organizations may have a different way of doing things, and there may be personality clashes between the two groups of managers.

What is involved in deciding on a merger or acquisition?

Eventually you arrive at two figures

the second is what it is worth to the company making the acquisition.

the first is what the company is worth to the current owners

The next step is to analyze the potential target.

This means not only understanding its products and its customers, but also its cost structure,

any future investments that might be necessary if it were bought.

because the aim is to make substantial savings when the two companies join together

The initial idea will come from the board of directors

it is a very long-term strategic decision and operational managers are unlikely to put forward the idea of joining together with a company who they see as a competitor in their day-to-day work.