The definition of ‘is’
Still a situation that can occur during certain corporate actionssuch as acquisition. In certain situations, the acquiring firm will offer a combination of cash and shares, and the shareholders of the company being acquired can take either. After the election of the shareholders, the remaining shares distributed upon the availability of funds or shares is not enough to satisfy the guests that the tender of the shareholders. If this occurs, the company provides a mix of cash and stock for each offer submitted, so that everyone still gets their cut from the transaction.
Breaking down the ‘equal to’
Equal to the support of shareholders by ensuring that the company can stick to its original purpose, and not favor some investors compared to other (i.e. to give a percentage of shareholders money they wanted, but deliver shares with others). This means that each investor may not receive his initial election; it ensures that all investors receive the same reward.
Other situations in which the need to distinguish, you may experience bankruptcy or liquidation, special dividend, stock split, and spinoffs. And these corporate actions must be approved by the shareholders and the company, as a rule, list them on the firm ‘s proxy statementfiled in anticipation of the public annual meeting, shareholders-individuals must still sometimes be sacrificed to increase the wealth of shareholders.
Differentiation and additional considerations about the merger
Mergers occur for several reasons, including the increase in market share through horizontal mergers, to reduce transaction costs through vertical merger, market expansion, and/or joint products through cogeneric mergers, all to increase revenue and increase profits in the interests of the shareholders of the company. After the merger, the shares of the new company are distributed to existing shareholders as the original businesses.
An example of merging of two companies in selected industries in 2017 Amazon/whole foods merger , which received tremendous investor and the attention of the media. Amazon acquired organic grocery chain whole foods for 13.7 billion dollars in cash after the shareholder approvals. For Amazon, this represents a significant progress in its attempt to sell products online and its competition with grocery retailer Walmart. For whole foods, this has helped to answer some of their financial difficulties.
When deciding on the merger, in addition to how both companies will reward shareholders, it is important to take into account the Federal Trade Commission recommendations on the management of the industry, low and prevent the creation of monopolies. For example, it is important to ask whether the proposed merger will create or enhance market power or not. Antitrust concerns arise guests with the proposed horizontal mergers between direct competitors.