Industrial Engineering 2
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Transcript of Industrial Engineering 2
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o The figure shows an example of an entity service. Several of its capabilities
are reminiscent of traditional CRUD (create, read, update, delete) methods.
Merger
The combining of two or more companies, generally by offering the
stockholders of one company securities in the acquiring company
in exchange for the surrender of their stock.
In business or economics a merger is a combination of
two companies into one larger company. Such actions are commonly
voluntary and involve stock swap or cash payment to the target.
Stock swap is often used as it allows the shareholders of the two
companies to share the risk involved in the deal. A merger can
resemble a takeover but result in a new company name (often
combining the names of the original companies) and in
new branding ; in some cases, terming the combination a "merger"
rather than an acquisition is done purely for political or
marketing reasons.
Classification of Mergers
o Horizontal mergers take place where the two merging
companies produce similar product in the same industry .o Vertical mergers occur when two firms, each working at
different stages in the production of the same good,
combine.
o Conglomerate mergers take place when the two firms operate
in different industries.
http://www.wordiq.com/definition/Corporationhttp://www.wordiq.com/definition/Stock_swaphttp://www.wordiq.com/definition/Takeoverhttp://www.wordiq.com/definition/Brandhttp://www.wordiq.com/definition/Industryhttp://www.wordiq.com/definition/Conglomeratehttp://www.wordiq.com/definition/Conglomeratehttp://www.wordiq.com/definition/Stock_swaphttp://www.wordiq.com/definition/Takeoverhttp://www.wordiq.com/definition/Brandhttp://www.wordiq.com/definition/Industryhttp://www.wordiq.com/definition/Conglomeratehttp://www.wordiq.com/definition/Corporation -
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o A unique type of merger called a reverse merger is used as
a way of going public without the expense and time required
by an IPO .
Examples
o Hewlett-Packard; with Compaq (Announced Sept. 2001 - Final
May 2002) ($25 billion)
o AOL Time Warner; America Online and Time Warner ($166
billion)
o Citigroup; Citicorp and Travelers Group ($73 billion)
o J.P. Morgan Chase, Bank One (announced January 14, 2004)
($59 billion)
o Procter & Gamble buy Gilette ($54 billion)
o Bank of America; with FleetBoston Financial ($47 billion)
Acquisition
A corporate action in which a company buys most, if not all, of
the target company's ownership stakes in order to assume control
of the target firm. Acquisitions are often made as part of a
company's growth strategy whereby it is more beneficial to take
over an existing firm's operations and niche compared to
expanding on its own. Acquisitions are often paid in cash, the
acquiring company's stock or a combination of both.
Acquisitions can be either friendly or hostile. Friendly
acquisitions occur when the target firm expresses its agreement
to be acquired, whereas hostile acquisitions don't have the same
agreement from the target firm and the acquiring firm needs to
actively purchase large stakes of the target company in order to
have a majority stake.
In either case, the acquiring company often offers a premium on
the market price of the target company's shares in order to
entice shareholders to sell.
http://www.wordiq.com/definition/Reverse_mergerhttp://www.wordiq.com/definition/IPOhttp://www.wordiq.com/definition/Reverse_mergerhttp://www.wordiq.com/definition/IPO -
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Examples
o Corp.'s bid to acquire Dow Jones was equal to a 65% premium
over the stock's market price.
o San Miguel Corporation
SMC acquired 51% interest in Universal LRT Corp. Ltd.,
the company in charge of developing the Metro Rail
Transit Line 7 (MRT7). In December 2010, SMC through
its subsidiary Vega Telecom, acquired AGN Philippines
which owns 40% stake of Eastern Communications
(Eastern Telecom) from ISM Communications Corp., a
company controlled by businessman Roberto Bobby
Ongpin.
Parent Company
A company that controls other companies by owning an influential
amount of voting stock.
Companies can become parent companies by many different means.
The two most common ways are through (1) acquisitions of smaller
companies and (2) the spinoff or creation of subsidiaries.
Examples .
o General Electric is the parent company of CNBC
o Lopez Holdings Corp. is the parent company of multimedia
conglomerate ABS-CBN Broadcasting Corp. and First
Philippine Holdings Corp
o PLDT is the parent of Smart Communications, Telesat
Philipines
Subsidiary
A company whose voting stock is more than 50% controlled by
another company, usually referred to as the parent company.
As long as the parent company has more than 50% of the voting
stock in the subsidiary, it has control. In the case of a foreign
subsidiary, the company under which the subsidiary
is incorporated must adhere to the laws of the country in which
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slowly and systematically over a long period of time, or in large
lots over a short time period.
For a business, divestiture is the removal of assets from the
books. Businesses divest by the selling of ownership stakes,
the closure of subsidiaries, the bankruptcy of divisions, and so
on.
In personal finance, investors selling shares of a business
can be said to be divesting their interests in the company being
sold.
Examples
o For example, a railroad line might purchase a coal mining
company to provide a direct source of fuel for its fleet of
locomotives. But with development of more efficient diesel
engines, the value of that mine becomes seriously eroded.
As the railroad replaces its steam engines with diesels, it
has no use for its coal, except to sell it to someone else.
Thus, it faces a crucial decision of whether to sell the
mine or hold on to it and enter the coal supply business.
Read more: Corporate Divestiture -
benefits http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSg
http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSghttp://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Divestiture.html#ixzz1QkNTIcSg -
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Source:
http://www.investopedia.com/terms/
http://www.justsharethis.com/top-10-biggest-companies-in-the-world-
2009/
http://www.thefreedictionary.com/
http://www.wordiq.com/definition/Merger
http://beginnersinvest.about.com/od/investingglossary/g/parent-company.htm
http://www.pinoyexchange.com/forums/showthread.php?t=466999
http://www.investopedia.com/terms/http://www.justsharethis.com/top-10-biggest-companies-in-the-world-2009/http://www.justsharethis.com/top-10-biggest-companies-in-the-world-2009/http://www.thefreedictionary.com/http://www.wordiq.com/definition/Mergerhttp://beginnersinvest.about.com/od/investingglossary/g/parent-company.htmhttp://beginnersinvest.about.com/od/investingglossary/g/parent-company.htmhttp://www.pinoyexchange.com/forums/showthread.php?t=466999http://www.investopedia.com/terms/http://www.justsharethis.com/top-10-biggest-companies-in-the-world-2009/http://www.justsharethis.com/top-10-biggest-companies-in-the-world-2009/http://www.thefreedictionary.com/http://www.wordiq.com/definition/Mergerhttp://beginnersinvest.about.com/od/investingglossary/g/parent-company.htmhttp://beginnersinvest.about.com/od/investingglossary/g/parent-company.htmhttp://www.pinoyexchange.com/forums/showthread.php?t=466999