Rationale for mergers
Academics and practitioners have identified several major reasons that drive firms’ merger, acquisition, and breakup decisions.
Identify the term or motive for the merger and acquisition with its description.
Description =Term or Motive for Merger
• A highly profitable firm in a high tax bracket acquires a firm with substantial accumulated tax losses. _____
• If two firms merged, the value of the new company would exceed the current pre-merger values of the individual firms._____
• A merger is driven by the managers’ desire to increase the size of the firm rather than by strict economic analysis .____
• During the 1980s, Hallmark acquired Binney & Smith (manufacturers of Crayota Crayons and Magic Markers) and Univision (a Spanish-language TV network) to expand its line of products in different segments and protect against the seasonal nature of its core greeting card business.________
