FINE 434- Final Exam Guide - Comprehensive Notes for the exam ( 35 pages long!)
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Critical to healthy expansion of business firms. Redistribution of wealth from employees and other stakeholders to shareholders. Offer made to shareholders to buy their shares for a given price. Acquisition: basically any deal; merger or tender offer. Corporate restructuring: cha(cid:374)ges to i(cid:373)p(cid:396)o(cid:448)e fi(cid:396)(cid:373)s" ope(cid:396)atio(cid:374)s, poli(cid:272)ies, a(cid:374)d st(cid:396)ategies. Rationale: economies of scale and scope, synergies. Government regulation due to potential anticompetitive effects. Improve information: lower transaction costs, reduce lock-up problems. As markets became globalised, traditional justifications for vertical mergers fell away. However, more companies are reverting to vertically integrated structures. Reasons: simplicity: customers want well-integrated products (e. g. , apple), efficiency (e. g. , tesla), need for speed (e. g. , zara), geopolitical uncertainty and the environment (e. g. , ferrero, ikea, disney). Rationale: diversification, (cid:862)good (cid:373)a(cid:374)age(cid:396)s (cid:272)a(cid:374) (cid:373)a(cid:374)age a(cid:374)(cid:455)thi(cid:374)g. (cid:863) Defines the long-term plans, policies, and culture of an organisation. Strategic planning is a dynamic process that requires inputs from all segments. Acquisition and restructuring policies and decisions should be part of overall plans.