Conglomerate merger Product extension: The acquiring and acquired firms are functionally related in production or distribution Market extension: The firms produce the same products but sell them in different geographic markets Other conglomerate: The firms are essentiall unrelated in the products they produce and distribute
Conglomerate Merger • Product extension: The acquiring and acquired firms are functionally related in production or distribution. • Market extension: The firms produce the same products but sell them in different geographic markets. • Other conglomerate: The firms are essentially unrelated in the products they produce and distribute
Merger waves Period Name Facet [11 1893-1904 First Wave Horizontal mergers 1919-1929 Second Wave ertical mergers 1955-1970 Third Wave Diversified conglomerate mergers Co-generic mergers 1974-1989 Fourth Wave Hostile takeovers Corporate Raiding 1993-2000 Fifth Wave Cross-border mergers, mega-mergers Globalisation 2003-2008 Sixth Wave Shareholder Activism Private Equity, LBO 2014 Seventh Wave
Merger Waves Period Name Facet [31] 1893–1904 First Wave Horizontal mergers 1919–1929 Second Wave Vertical mergers 1955–1970 Third Wave Diversified conglomerate mergers 1974–1989 Fourth Wave Co-generic mergers; Hostile takeovers; Corporate Raiding 1993–2000 Fifth Wave Cross-border mergers, mega-mergers 2003–2008 Sixth Wave Globalisation, Shareholder Activism, Private Equity, LBO 2014- Seventh Wave
Mergers in The Real World Google Acquisitions: Motorola mobility waze, deja News( Google Groups), Dodgeball(Google Latitude), Jotspot (Google Sites Grand Central (Google Voice), Next New Networks(YouTube Next lab and audience Development Group) Spinnoffs: Frommers, SketchUp, Google Radio automation
Mergers in The Real World Google • Acquisitions: Motorola Mobility, Waze, Deja News (Google Groups), Dodgeball (Google Latitude), JotSpot (Google Sites), GrandCentral (Google Voice), Next New Networks (YouTube Next Lab and Audience Development Group). • Spinnoffs: Frommers, SketchUp, Google Radio Automation
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Why So Many Mergers in The real World? Possible answers Economies of scale: both in production and in things like r&D Economies of scope: synergies between the two companies. Defensive mergers: to deal with contracting markets, excess capacity Decrease competition: these are the mergers that antitrust is worried about
Why So Many Mergers in The Real World? Possible Answers: • Economies of scale: both in production and in things like R&D. • Economies of scope: synergies between the two companies. Defensive mergers: to deal with contracting markets, excess capacity. • Decrease competition: these are the mergers that antitrust is worried about