Download - 11 mergers and business health
MERGERS AND THE BUSINESS HEALTH
Prepared by: Jammie Ann Felipe
Mergers and the Business Health
Do mergers create value?
Corporate Alliances
or Strategic Alliance, a cooperative deal that stops short of a merger.
Form of Corporate Alliance
Joint Venture A corporate alliance in which two or
more independent companies combine their resources to achieve a specific, limited objective.
Private Equity Investments
Leveraged Buyout (LBO) A situation in which a small group of
investors (which usually includes the firm’s managers) borrows heavily to buy all the shares of a company.
Private Equity Investments
Divestitures The sale of some of a company’s
operating assets.
Types of Divestitures
Spin-Off A divestiture in which the stock of a
subsidiary is given to the parent company’s stockholders.
Carve-Out A minority interest in a corporate
subsidiary is sold to new shareholders, so the parent gains new equity financing yet retains control.
Liquidation Occurs when the assets of a division are
sold off piecemeal rather than as an operating entity.
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