M&A in the Financial Services 2005 Outline Abstract Introduction Body 1 Reasons for acquisition 2 Benefits for both parties 3 Royal Bank of Scotland 4 Shares 5 Cooperation between Santander and RBS 6 Potential growth benefit 7 Santander and Abbey before acquisition 8 Some problems remaining Conclusion References Abstract The shareholders also have benefit from the acquisition: Abbey's shareholders have the opportunity to own a significant part of the Banco Santander. Under the terms of acquisition, Abbey shareholders receive one new Banco Santander share for every one Abbey share. The effective acquisition will result is existing shareholders of Banco Santander owning 76.4 percent of the issued shares of Banco Santander, and the corresponding 23.6 percent will be owned by the Abbey shareholders. Introduction Mergers and acquisitions in financial services business area are very common and result in consolidation of the business unit. Acquisition is beneficial for all sides involved and Santander's acquisition of Abbey National of the UK is an evidence of this. Abbey has a major position in the United Kingdom mortgage market. Its strong distribution network represents for Banco Santander and Abbey shareholders a valuable opportunity: application of Banco Santander's commercial and technological practices to Abbey's banking operations. Conclusion It is hard to judge how successful the acquisition of Abbey by Banco Santander was because only less than 5 months have passed. The positio... ... middle of paper ... ...8.htm">http://news.xinhuanet.com/english/2004/09/20/content_1995838.htm (accessed April 8, 2005). Flanagan, Martin. "Abbey's Scottish arm can breathe easier - for now." The Scotsman, 25 Nov 2004. Loewenberg, Samuel. "Santander's Trial." Forbes. (14 March 2005). http://www.forbes.com/business/global/2005/0314/020.html. (accessed April 8, 2005). Think Spain. "Santander boss upbeat about Abbey acquisition." http://www.finkspain.com/news-spain/7155. (accessed April 8, 2005). TurkishPress.com. "SCH finalizing Abbey acquisition." (11 Dec 2004). http://www.turkishpress.com/news.asp?ID=33566 (accessed April 8, 2005).
The second section will be a report to the board of directors that identifies a synergistic acquisition candidate for Target. This section will identify Target's proposed acquisition terms, price, financing, and potential negotiation strategies. This segment will also include price / earnings ratios, book value, current market value, and liquidation based on the supporting financial data. Also in this part will be a discussion of the general and specific risks inherent in an acquisition strategy.
Throughout its 200-year history, the Bank of New York has been involved in many mergers and acquisitions. Through mergers with the New York Life Insurance & Trust Company, The...
It is proper to present a business definition of merger as it found on legal reference with the ultimate goal in the pursuing of an explanation on which this paper intents to present. A merger in accordance with the textbook is legally defined as a contractual and statuary process in which the (surviving corporation) acquires all the assets and liabilities of another corporation (the merged corporation). The definition go even farther to involve and clarify about what happen to shares by explaining the following; “the shareholders of the merged corporation either are paid for their share or receive the shares of the surviving corporation”. But in simple terms is my attempt to define as the product or birth of a corporation on which typically extends its operation by combining with another corporation. So from two on existence corporations in the process it gets absorbed into becomes one entity. The legal definition also implied more than meet the eye. The terms contractual and statuary, it implied a process on which contracts and statuary measures emerge as measures to regulate, standardized, governing or simply at times may complicate whole process. These terms provide an explicit umbrella and it becomes as part of the agreement formulating or promoting a case for contracts to be precedent, enforced or regulated in a now or in the future under a court of law under the Contract Business Law Statue of Practice. As for what happens to the shares of the involved corporations no more explanation is needed as the already actions mentioned clearly stated of the expectations of a merge’s share involvement.
The objective of this report is to give an overall view on research and analysis to regards of two companies, Wm Morrison Supermarkets Plc and Tesco Plc that I have chosen for. In this report, I will be comparing two companies’ financial analysis based on their comprehensive income and balance sheet for one year; and also will be comparing their generating cash ability, cash management and financial adaptability based on statement of cash flows for the past two year and also determine whether the two companies have the ability to repay their debts to their creditors, generating into cash and going concern which related to finance.
"Robert and James Adam - Rare Book Collections Highlights -." National Library of Scotland. National Library of Scotland. Web. 02 Mar. 2010. .
This report will critically review the capital structure of the Royal Mail (RM) and the implications this has for the company with reference to its apparent value and the return required by equity investors. The report will take data from the latest set of accounts published by the RM and it accompanying investor reports. It will also refer to investors analysis and news item in an attempt to gain a qualitative impression of RM’s share value.. The numerical analysis will not use information that relates to time past the last full accounting period, however the conclusion will attempt reconcile any share price movement with the analysis. The report will assess three models for their suitability in analysing the capital structure of the RM, (Weighted Average Cost of Capital (WACC), Capital Asset Pricing Model (CAPM) and the dividend valuation model).
...dditionally, the merger can take place in smaller phases. For instance the first phase may include change of the physical look of the branches and the signage - – so as to convey a consistent view and experience for its customers. This phase may also include effective communication to the employees to educate them about the merger, ensure them of their positions and encourage them to participate in the merger. Second, the firm can totally combine the bank’s technology and the information systems which will allow the merged firm to operate as a single entity and to become fully operational. The management should implement the merger with care and prudence, aiming for minimal disruption for the customers and should communicate extensively to ensure all its stakeholders are kept fully informed as they make changes.
Santander has grown rapidly in recent years through acquisitions. Through the acquisition of Abbey, they believed they could turnaround the company.
In terms of financial performance both companies have performed well. This brief review will focus on the financial performance such as profitability, solvency and liquidity.
Holinshed R. Historie of Scotland (2nd Ed. Chronicles of England, Scotland and Ireland 1587) "Historie of Scotland"
The acquiring company is forced to compete against other firms, which drives down the gains that its shareholders can realize from the deal. At the same time the shareholders of target companies benefit from the competition, receiving higher bids for their firm.
At a macro level as a result of the acquisition the combined size of Turner & Townsend Thinc was considered to be of strategic benefit to both firms. While there have been no official mass redundancies, role duplication has resulted in early retirement and resignations. However, the common problem faced after the acquisition is power struggles, excessive overhead, bureaucracy, uncontrolled layering, and decision strangulation.
Acquisitions can be very taxing on both the buyer and the seller during periods of negotiation through development of a binding contract: each wanting different terms and conditions. Neither understands the emotions behind the potential risks involved for both parties.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
A variety of groups are concerned in bank profitability for various reasons. The bank shareholders would want to know if the value of their investments is high or low. The investors also use current and past performance to predict future price of the banks’ shares traded on the stock exchanged. The management of the bank as trustee of the shareholders is evaluated and compensated on the basis of how well their decisions and planning have contributed to growth in assets and profits of their banks. Employees of bank also are concerned with profits, since their salaries and promotions are frequently tied to the profitability performance of their banks.