BLW 1002 Lecture Notes - Lecture 6: Time Warner
20 Sep 2016
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Shareholder rights cntd: right to vote for the executive compensation a. Defined as the combination of two roughly equivalent companies that combine together to form one much larger company: a+b = c, ex) exxon + mobil = exxon-mobil (successful merger, ex) time-warner + aol = time-aol (failed merger) If shareholders vote in favor of a merger, they are voting for the death of their respective corporation in order to create a new corporation. Shareholders of both corporations must vote in favor or merger in order for it to occur. Merger must be reviewed by the government to ensure it won"t violate anti-trust laws. Defined as a big company buying out a smaller company: a buys out b. Smaller company (also known as target company) does not survive. If shareholders of smaller company vote in favor of an acquisition they are agreeing to the death of their company.
