Deal Breaker
You’re the president of Manny’s Mealworms, a company that manufactures fishing tackle. Tuffy’s Trout has been in negotiations to buy your company. At first, the million-dollar deal sounds appealing. You start shopping online for Porsches. But as negotiations continue, you learn something devastating. Fifty percent of your employees will be laid off once the merger is complete.
You love your employees. They love you. Every day is like a singing revue of a Barney episode. So this firing half the force? Yeah, it's a deal-breaker. You refuse to proceed unless 100 percent of your employees’ jobs are protected.
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Finance: What's the difference between m...23 Views
Finance allah shmoop what's the difference between mergers and acquisitions
all right people listen up Merger that's what's about to
happen here it's a merger acquisition that's what's about to
happen here Corporate america is kind of same thing when
two companies merge while they generally you know attracted to
each other hopefully respect each other they share stock or
combined the stocks of each side and you know combine
efforts and then and then cuddle afterwards if they're successful
at the merger than the combination of two roughly equals
yields more than the one plus one combo that made
them so two companies get together on generally equal ish
footing In that case acquisitions are a combining more like
that eating thing on much different footing The large company
eats or buys the target either using its more highly
valued stock currency or it's taft to do so Well
why would a company acquire another Well the target might
have one hundred employees ninety of whom can be fired
with massive expense savings after the acquisition For the acquirer
such that economically the acquisition won't just makes a whole
lot of financial sense acquisitions happen for market power reasons
As well like imagine the negotiating leverage that amazon would
have if it bought the next five biggest online retailers
Or maybe it'll just kill them Probably not legal for
them to buy him anyway given the monopoly like dominance
of amazon these days But wow that would be a
powerful set of acquisitions And that would be a good
reason for ems on to acquire a whole bunch Things
and bezos would grow even more powerful maybe too powerful