Do mergers create value for the offeror and offeree Essay

Do mergers create value for the offeror and offeree - Essay Example For example, most of the big organizations are currently looking to expand their business to overseas countries in order to exploit the opportunities opened up by the globalization. Merger & Acquisition is one way of business expansion adopted by big companies. Gaughan (2007) defined merger as the combination of two corporations in which only one corporation survives while the merged corporation goes out of existence after the merger process (Gaughan, 2007, p.12). Theoretically mergers and acquisitions should be value creating for the shareholders of both the offeror and offeree companies. But in practice, it is not 100% true. This paper critically evaluates the pros and cons of merger and acquisition to the shareholders of both the offeror and offeree companies Increased market share, lower cost of production, higher competitiveness, acquired research and development know how and patents, Financial leverage, Improved profitability etc are some of the advantages or values for the offeror and the offeree through M & A (Helium, 2010). The offeror and the offeree can increase their customer base through merger and acquisition. For example, consider the recent merger deal between two telecommunication giants, India’s Bharti Airtel and South Africa’s MTN. As per this deal, MTN and its shareholders would acquire around 36 per cent economic interest in Bharti Airtel, while Bharti Airtel would acquire 49 per cent stake in South African telecom giant MTN (Indias 11 largest M&A deals, 2009). The above deal helped both the companies to exploit the opportunities in India and South Africa more judiciously for the mutual benefits. Bharti Airtel will get the assistance from MTN for their operations in South Africa whereas the MTN would get a ssistance from Bharti Airtel for their operations in India. The understanding of business climate and formalities in these countries can be exchanged for the

Ethics Project Case Study Example | Topics and Well Written Essays - 500 words

Ethics Project - Case Study Example This is because the company might not be able to establish the efficacy of the other levels of the client’s security system that were done by another or other computer network security companies (George 45). The risk aversion principle supports my recommendation because the event of liability for a security breach would tarnish the reputation of the company making it lose the trust of its many clients when it would easily borne the loss of one potential client. When declining to grant the client’s request, the CEO would need to provide the client with sufficient information on all potential risks involved for both the company and the client. This would comply with the guiding principle of the Association of Information Technology Professionals’ ideal of upholding honesty. Finally, my recommendation to decline the client’s request would be to benefit the many clients of the company by reassuring them of the company’s accountability. Based on the utilitarian principle, it would be better for the company to lose this potential client and safeguard the trust of its many clients (George 45). Snapchat’s actions were not ethical because they would have caused serious damages to its subscribers. As such, the first specific action that Snapchat should have taken would have been to verify whether the security vulnerability was genuine or not in order to be sure of the plan of action. Another specific action for Snapchat would have been to initiate containment measures based on the extent of the vulnerability or the accrued damages in order to attend to its corporate duty of taking care of its clients. The final action would have been to notify its clients about the security vulnerability and reassure them that it has contained it in order to demonstrate its accountability to its clients (Perlroth & Wortham p8). The actions of