Assignment

Assignment

Requirement # 3

The new earnings per share of acquirer plc after merging with target plc are still £4 per share. Whereas, before merging, the earnings per share of acquirer plc were £4 per share. Analyzing this situation, the old shareholders of the company are not worse off and nor better off after merging with target plc. In addition to this, the share price of the company will also decrease, as the supply of acquirer plc's shares are increasing in the market, as the number of shares will increase in merging with target plc. Before merging, the total number of shares of acquirer plc was 1million shares. Whereas, after merging; the new total number of shares of the company will be (1million + 0.625million) 1.625million shares.

Requirement # 5

Definition

By definition, the merger is the set of agreements forged strategic nature between two or more independent companies who choose to pool their resources (technological, production, trade) in order to achieve common goals.

Types of mergers can be identified using two criteria: the size of firms on the one hand and their level of activity on the other.

Size of businesses

Depending on the size of firms, we distinguish the merger equal and the merger.

The amalgamation or merger egalitarian society by creating new

It brings together two or more companies of comparable size that pool their resources to give birth to a new company. It is rare that companies opt for the merger egalitarian view of the complexity it presents in practice.

The merger-takeover or merger

Unlike the merger by creation of new company, the merger brings together companies of different sizes. This transaction resulted in an increase in the capital of the firm and absorbing the loss of legal personality of companies absorbed.

We can say that the operations of merger and acquisition ...