Merger Acquisition Finance

IntroductionToday, companies recognize that maximizing growth potential often nitty-gritty expanding sales and/or operations outside of domestic markets. Whether attempting to join on sales by exploring foreign markets, or attempting to cut cost by adding manufacturing locations in low cost countries, much and more companies ar entering the global marketplace. Some of the options companies consider are licensing agreements, joint ventures, exporting, and operating in fully owned subsidiaries. In the miscue of Sony and MGM, a foreign company purchased an Ameri groundwork company, and exposed itself to the intricacies of non only a merger, but the issues of doing business internationally.

Pro?s and Cons? of Merger AcquisitionThe pro?s and con?s of a merger/acquisition are many just to pee a few:Pros:Long term respect is created when have on companies.

More efficient use of both companies assets.

mathematical operation of the companies pass on be unrelated to the size of the company.

Stock value changes.

Cons:The focus of both companies can be lost in the increase in size due to the merger.

Increase in overhead and expenses.

The company can become less sophisticated and lose competitiveness.

Due to merging some employees will be laid off.

Stock value changes.

In the merger of Sony and Metro-Goldwyn-Mayer (MGM) in that location were pros and cons as well.

Pros:Merge the huge MGM read library onto videodisk discs for sale to the general public.

Merge the huge MGM television betoken library to DVD disc to be distributed and sold.

Continue to crap the MGM library by capitalizing on emerging technologies.

Open the film library to world-wide markets just not the U.S. market.

Distribution and marketing capabilities will increase through Sony.

Value of Sony?s stock can increaseCons:Cost of the merger increased to 4.85 from 4.7 billion.

MGM will still be having 60% ownership.

Comcast will have a minority amuse in the ventureValue of MGM?s stock...

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