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Learn: Mergers and Takeovers - Evaluation
WJEC Eduqas GCE A LEVEL in BUSINESS specification
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Welcome!Great to see you ready to learn about Mergers and Takeovers: Evaluation. Building on your knowledge of growth strategies and integration, we'll explore how businesses evaluate mergers and takeovers.
What are Mergers and Takeovers?A merger occurs when two companies agree to combine and form a single entity. A takeover happens when one company buys another, often gaining control. Both are examples of external growth strategies.
Why Evaluate Mergers and Takeovers?Evaluation is crucial to determine if the merger or takeover aligns with the company’s strategic goals. Factors like financial performance, market share, and potential risks must be considered to assess success or failure.
What is the key difference between a merger and a takeover?
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Factors to Evaluate in Mergers and TakeoversWhen assessing mergers and takeovers, businesses focus on factors such as:Financial performance: Will the combined company be profitable?Market opportunities: Can the merger increase market share or access new markets?Synergies: Can the companies reduce costs or improve efficiency together?Risks: Are there potential challenges like cultural clashes or regulatory issues?
Which factors are important when evaluating mergers and takeovers? (Select all that apply)
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Benefits of Mergers and TakeoversSuccessful mergers and takeovers can offer:Economies of scale: Lower costs due to larger operations.Increased market share: Greater presence in the industry.Access to new resources: Gaining technology, expertise, or talent.
Challenges of Mergers and TakeoversHowever, they may face challenges such as:Integration issues: Difficulties in combining cultures or systems.Financial burden: High acquisition costs.Regulatory concerns: Competition laws may restrict deals.
Match the items on the left with their correct pairs on the right
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Review Time!Well done! You've learned about the evaluation of mergers and takeovers, including their benefits and challenges. Let's test your understanding further.
A merger occurs when two companies {{blank0}} to form a {{blank1}} company.
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Which of the following are challenges of mergers and takeovers? (Select all that apply)
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What is the primary reason for evaluating mergers and takeovers?
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