Types of mergers...

1. 1. Horizontal Merger
2. Vertical Merger
3. Conglomerate Merger
TYPES OF MERGER
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2. Merger of corporation in similar or related product lines are termed a
horizontal merger.
merge with
HORIZONTAL MERGER
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3. A vertical merger is the coming together of companies at different stage
or level of the same product or services
merge with
VERTICAL MERGER
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4. When two companies that operates in completely different industry, regardless
of the stage of production, a merger between both companies is known as
conglomerate merger.
merge with
CONGLOMERATE MERGER
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5. 1. Friendly Acquisition
2. Reverse Acquisition
3. Hostile Acquisition
TYPES OF ACQUISITION
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6. A friendly takeover occurs when one corporation acquires another with
board of directors approving the traction.
FRIENDLY ACQUISITION
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7. The smaller company having visionary idea is forcefully acquired.
HOSTILE ACQUISITION
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8. A private company take over the public company
REVERSE ACQUISITION
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9. 1. Poison Put
2.Poison pill
3. Golden Parachute
4. Supermajority
5. Greenmail
6. Pac-Man Defense
DEFENSE MECHANISM
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10. A company's board of directors believes that a larger competitor may
attempt to acquire it in the future. As a defense, the company incurs new
debt by issuing corporate bonds. As part of the newly issued bond, the
board includes a poison put covenant, which is a provision that stipulates
bondholders can receive early repayment of the debt should a triggering
event occur, such as a hostile takeover.
The total value of the bonds is $50 million. For the competitor to
successfully acquire the company, it must not only be able to afford the
purchase of a controlling interest of shares but also afford a potential
immediate repayment of $50 million to bondholders. If the acquirer does
not have the money to pay this additional acquisition cost, they may need to
withdraw their hostile takeover attempt, which means the poison put
strategy was effective for the target company.
POISON PUT
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11. Netflix is making moves to prevent a hostile takeover from billionaire
Carl Icahn, who disclosed a nearly 10 percent stake in the company.
Netflix adopted a poison pill defense, aimed at preventing an outsider
without board approval from acquiring too large a stake in Netflix.
Netflix Inc adopted a poison pill defense against a hostile takeover,
days after activist investor Carl Icahn disclosed a stake in the video
rental company.
The move is aimed at preventing an outsider who lacks Netflix board
approval from accumulating a stake of 10 percent or more, the company
said in a statement. The board approved the provision on Friday. It
remains in effect for three years.
The poison pill is a common strategy used by companies in response to
Icahn.
POISON PILL
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12. Yahoo laid out its golden parachute plans for all of its full-time
employees Tuesday, in a filing with the Securities and Exchange
Commission. The filing outlines two change-in-control severance plans,
should the Internet search pioneer find itself under new ownership, aka
Microsoft.
Yahoo, which is facing an unsolicited buyout bid from Microsoft, will
offer both full-time employees and executives anywhere from four
months to two years of severance pay, depending on their job title.
GOLDEN PARACHUTE
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13. US-based automotive and electric company Tesla requires a
supermajority vote to approve major corporate actions such as mergers,
acquisitions, and changes to the board’s compensation. Tesla’s voting
provision requires at least two-thirds shareholders’ approval for
corporate measures to pass.
Although criticized by many shareholders and analysts, Tesla defended
the company’s limited voting provisions and stated that they “enable the
company to meet the long-term interests of its stockholders without
being disrupted by these short-term variations and the opportunistic
scenarios they often attract.”
SUPERMAJORITY PROVISION
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14. Sir James Goldsmith was a notorious corporate raider of the 1980s. He
orchestrated two high-profile greenmail campaigns against St. Regis
Paper Company and Goodyear Tire and Rubber Company. Goldsmith
earned $51 million from his St. Regis venture and $93 million from his
Goodyear raid, which took only two months.
In October 1986, Goldsmith purchased an 11.5% stake in Goodyear at an
average cost of $42 a share. He also filed plans to finance a takeover of
the company with the Securities & Exchange Commission (SEC). Part
of his plan was to have the company sell off all of its assets except its
tire business, which was not received well by Goodyear executives.
GREEN MAIL
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15. The most famous example of a company using the Pac-Man Defense is
also the origin of the term. In 1982, Bendix Corporation tried to take
over the aggregates and heavy building materials firm, Martin Marietta,
by obtaining a controlling interest in Martin Marietta stock.
Martin Marietta’s management sold off multiple business segments and
borrowed over $1 billion to fight the takeover attempt. Bendix
Corporation owned over 70% of Marietta’s stock while Marietta bought
over 50% of Bendix’s stock through a tender offer. This fight damaged
both companies as they expended huge amounts of cash to buy each
other’s shares. In the end, Allied Corporation acted as a white knight
and acquired Bendix Corporation.
PAC-MAN DEFENSE
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16. THANK YOU!!!!
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