Are Mergers and Corporate Consolidation Good for Shareholders? Janet Yellen (1998)

• Report rights infringement
• published: 15 Sep 2015
• views: 3

Mergers and acquisitions are both aspects of strategic management, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. M&A; can be defined as a type of restructuring in that they result in some entity reorganization with the aim to provide growth or positive value. Consolidation of an industry or sector occurs when widespread M&A; activity concentrates the resources of many small companies into a few larger ones, such as occurred with the automotive industry between 1910 and 1940. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations. From a legal point of view, a merger is a legal consolidation of two companies into one entity, whereas an acquisition occurs when one company takes over another and completely establishes itself as the new owner (in which case the target company still exists as an independent legal entity controlled by the acquirer). Either structure can result in the economic and financial consolidation of the two entities. In practice, a deal that is an acquisition for legal purposes may be euphemistically called a "merger of equals" if both CEOs agree that joining together is in the best interest of both of their companies, while when the deal is unfriendly (that is, when the target company does not want to be purchased) it is almost always regarded as an "acquisition". Major 1990s Top 10 M&A; deals worldwide by value from 1990 to 1999: Rank Year Purchaser Purchased Transaction value (in USD) 1 1999 Vodafone Airtouch PLC[39] Mannesmann 202,000,000,000 2 1999 Pfizer[40] Warner-Lambert 90,000,000,000 3 1998 Exxon[41][42] Mobil 77,200,000,000 4 1998 Citicorp Travelers Group 73,000,000,000 5 1999 SBC Communications Ameritech Corporation 63,000,000,000 6 1999 Vodafone Group AirTouch Communications 60,000,000,000 7 1998 Bell Atlantic[43] GTE 53,360,000,000 8 1998 BP[44] Amoco 53,000,000,000 9 1999 Qwest Communications US WEST 48,000,000,000 10 1997 Worldcom MCI Communications 42,000,000,000 2000s Top 10 M&A; deals worldwide by value from 2000 to 2010: Rank Year Purchaser Purchased Transaction value (in USD) 1 2000 Fusion: AOL Inc. (America Online)[45][46] Time Warner 164,747,000,000 2 2000 Glaxo Wellcome Plc. SmithKline Beecham Plc. 75,961,000,000 3 2004 Royal Dutch Petroleum Company "Shell" Transport & Trading Co. 74,559,000,000 4 2006 AT&T; Inc.[47][48] BellSouth Corporation 72,671,000,000 5 2001 Comcast Corporation AT&T; Broadband 72,041,000,000 6 2009 Pfizer Inc. Wyeth 68,000,000,000 7 2000 Spin-off: Nortel Networks Corporation 59,974,000,000 8 2002 Pfizer Inc. Pharmacia Corporation 59,515,000,000 9 2004 JPMorgan Chase & Co.[49] Bank One Corporation 58,761,000,000 10 2008 InBev Inc. Anheuser-Busch Companies, Inc. 52,000,000,000 2010–2014 Other notable M&A; deals from 2010 to 2014 include: Year Purchaser Purchased Transaction value (in USD) 2011 Google Motorola Mobility 9,800,000,000 2011 Microsoft Corporation Skype 8,500,000,000 2011 Berkshire Hathaway Lubrizol 9,220,000,000 2012 Deutsche Telekom MetroPCS 29,000,000,000 2012 Johnson & Johnson Synthes 19,700,000,000 2013 Softbank Sprint Corporation 21,600,000,000 2013 Berkshire Hathaway H. J. Heinz Company 28,000,000,000 2013 Microsoft Corporation Nokia Handset & Services Business 7,200,000,000 2014 Facebook WhatsApp 19,000,000,000 2014 SAP Concur Technologies 8,300,000,000 https://en.wikipedia.org/wiki/Mergers_and_acquisitions