There has been a new surge of mergers and acquisitions (M and A) in the last several years. Why is this? In the past, why have so many not been successful? In your opinion, what are the most important factors to be taken into account for a successful M and A? Provide an example to support your position. Solution Merger/Consolidation: In a merger, the acquiring firm gets all the assets and liabilities of the acquired firm, the acquired firm ceases to exist, and the acquiring firm keeps its name and identity. In a consolidation, the two pre-existing firms cease to exist and become part of a new business entity. 2. Acquisition of Stock: A tender offer is a public offer made directly to the shareholders of the target corporation to buy their shares for either cash or securities. These offers are often contingent on the acquiring company.

1. There has been a new surge of mergers and acquisitions (M and A) in the last several years. Why
is this? In the past, why have so many not been successful? In your opinion, what are the most
important factors to be taken into account for a successful M and A? Provide an example to
support your position.
Solution
Merger/Consolidation: In a merger, the acquiring firm gets all the assets and liabilities of the
acquired firm, the acquired firm ceases to exist, and the acquiring firm keeps its name and
identity. In a consolidation, the two pre-existing firms cease to exist and become part of a new
business entity.
2. Acquisition of Stock: A tender offer is a public offer made directly to the shareholders of the
target corporation to buy their shares for either cash or securities. These offers are often
contingent on the acquiring company