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Running Head: Mergers and Acquisitions
Mergers and Acquisitions Paper
Shae Lewis
July 9, 2007
Mergers and Acquisitions
The following document will assess the impact of mergers and acquisitions on a business and will include sensible and dubious reasons for benefits, costs of cash, and stock transactions. The paper will examine financial risks of merging with or acquiring an organization in another country and how those risks could be alleviated.
A merger is a combination of two firms into one, with the acquirer assuming assets and liabilities of the target firm. (Brealey, Myers, and Marcus 2003) An acquisition is obtaining control of another corporation by purchasing all or majority of its stocks or assets. The impact that mergers and acquisitions have on a business are that one of the major factors that must be considered in international mergers is the rate of currency exchange. Merging and acquisitions may impact assets and finances as well. Exchange rates impact the M&A marketplace in a number of ways; with the US dollar weak against the euro, US companies become likely targets for European buyers seeking to take advantage of their currency's current buying power. Multinational companies that sell goods in the US must als ...