18
Mergers and takeovers
This chapter examines the reasons why the managers of your company may want to merge it with another, and the ways in which mergers are financed. Then the merger process itself is described, along with the rules and regulations designed to prevent unfairness to shareholders. A major question to be addressed is: who gains from mergers? Is it shareholders, managers, advisers, etc.? Shockingly, the evidence suggests that in less than half of corporate mergers do the shareholders of the acquiring firm benefit.
Many people, for various reasons, differentiate between the terms ‘merger’, ‘acquisition’ and ‘takeover’ – for example, for accounting and legal purposes. However, like most commentators, this book will use the ...
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