Select Harvests can be seen as an attractive target for Wesfarmers as they are evidently dealing with the same industry, they are one of Australia’s largest almond growers and the country’s leading manufacturer, processor and marketer of nut products, health snacks and muesli to the Australian retail and industrial markets, in addition to exporting almonds globally. Select Harvests would strongly fit into the organisational culture at Wesfarmers as they both uphold similar values of diversity, shareholder value and creating long term sustainable growth.
Before undertaking an acquisition or merger, a strategic rationale should be determined that results in an immediate or near-term increase in shareholder value. Select harvest has a market
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When companies merge, frequently they have an opportunity to combine locations or reduce operating costs by integrating and streamlining support function. This economic strategy has to do with economies of scale: When the total cost of production of services or products is lowered as the volume increases, the company therefore maximizes total profits. This occurs when a larger firm with increased output can reduce average costs. Lower average costs enable lower prices for consumers.
Mergers can give the acquiring company an opportunity to grow market share without having to really earn it by doing the work themselves - instead, they buy a competitor's business for a price. Usually, these are called horizontal mergers. In this case the major supermarkets such as woolworths and coles have a nut an health food sector and they would choose to buy out a Select Harvests a competing nut and health food company, enabling them to make more organic foods and nuts and sell more to its brand-loyal
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A merge may expand two companies' marketing and distribution, giving them new sales opportunities. A merger can also improve a company's standing in the investment community: bigger firms often have an easier time raising capital than smaller ones.
One of the more successful acquisition strategies is to examine other businesses to see if there are costs that can be stripped out or revenue advantages to be gained by combining the companies. Ideally, the result should be greater profitability than the two companies would normally have achieved if they had continued to operate as separate entities. This strategy is usually focused on similar businesses in the same market, where the acquirer has considerable knowledge of how businesses are operated.
Are there any potential problems with the merger (eg
fail (Cheng, 2012). Mergers and acquisitions are much common in these days and only a few of them are end up in successes. Even though mergers and acquisitions are not result much successes rate, many organizations are still preferring it because, it is used as a cooperative strategy but nowadays it is used for cooperative development. The cultural differences and merger integration can be considered as an important factor for the failure rate but this study mainly focused
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate clinical and managerial interventions.
Films as Mergers and Acquisitions Firms merge with or takeover another company for different reasons: Growth; The fastest way for growth to occur is to be involved in a merger and because of this it is the main basic factor for merging, diversification; entering different markets in order to cut the dependency on current product range (conglomerate integration), market power; when two rival companies merge the new company has an increase in market power and reduces the competitiveness of the market. A firm may also merge with the intent to asset strip but this is a short-term attempt to increase cash flow and is more likely to involve a horizontal integration type of merger. There are four main types of business integration, horizontal, vertical backward and forward and conglomerate integration. Vertical integration occurs when one firm takes over or merges with another in a different stage in the production process where-as a horizontal integration occurs when one company merges with another at the same stage of production in the same industry, out of the four types of integration this is the most common with such examples like EasyJet taking over Go and Coca-Cola taking over Orangina.
In addition to the pro-competitive economic effect some firms also experience what is known as a post-merger which is basically an incentive for a firm to raise downstream competitor costs by raising upstream market costs. Hence the increased price pressures the previously established downstream prices which cause conflict.
That brings a great challenge to succeed, and lets the leadership work in new and innovative ways to make such a merger successful. McClelland’s theory states, in regards to the need for achievement, that people strive “To excel one’s self.to rival and surpass others. to increase self-regard by the successful exercise of talent” (Kreitner & Kinicki, 2010, p. 215). By this definition, the merger would motivate leadership to excel in the face of a challenge, and to increase their professional self-regard in their success in doing so. On an individual level, you are asking the performers and employees to recognize both economic and social climates, and to come together in action to save both their careers, as well as their passion for life....
However, all mergers come with some conflict. The reason of failure of a merger is when the management does not support the merger. When a merger occurs, the target company and the acquiring one loss their stock replaced by the new stock issued by the created firm for the merger. Thus, the board of directors of the target company is obliged to give up some of their authority and its shareholder must give up their stocks, as we explain above. If the board of directors of the target company is opposed to the merger, it is a hostile merger.
As the business, people put it, to maximize the wealth of shareholders (Peavler, 2016). This could be done by pursuing more of an immediate reason that will realize the shareholders wealth maximization goal. However, this main reason may fail to be realized as most mergers depict negative results.
Mergers and acquisitions immediately impact organizations with changes of rights, and ideas and eventually, in practice. There are multiple reasons some are motives and financial forces just to name a few. There are financial risks of merging with or acquiring an organization this is why you must have a strategic plan in place in order to benefit.
It is helpful for some companies to merge with bigger companies to gain advantage like knowing competitor’s strategies and to take on more market share. Another boundary spanning technique is a joint venture. A joint venture is when two or more companies come together to develop which, one could not handle. For example, Sagar hospitals and Apollo hospitals came together as a joint venture. Because of merging, Sagar Apollo hospitals pulled more crowd with improved facilities and they have captured the market.
Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.
Conflict seems inevitable when trying to merge two companies. Conflict is described as the “Process which begins when one party perceives that the other has frustrated or is about to frustrate, some concern of his” (Kumar, 2009). Synergon’s CEO uses a “take no prisoners” approach and would fire most of the management team within 12 months of taking over a company using an approach they call neutron bombing. In cases where both companies are successful, like in the case of Synergon Capital and Beauchamp, you add even more conflict. The managers of Beauchamp are used to operating in a positive way that has produced profits for the company and you add Nick Cunningham a manager of Synergon who is used to restructure management in newly acquired poorly run companies; something has to give to make it successful.
“Every leveraged buyout can be considered risky” (Advantaged and Disadvantages of Leveraged Buyout 1). It all depends on the economy. If the economy is strong and secure, the buy out should remain strong and solid. If the economy is doing poorly, then the buyout’s success is challenged. Management buyout is a key advantage for leveraged buyouts. It can prevent a company from being shut down or taken over from other companies. To have a successful buyout, you will need to have specific characteristics the will make the buy out more appealing thus including proven management, a positive balance sheet, a diverse customer base, the potential to crew cost reductions through synergies between the merged companies, and market leadership. The positive balance sheet must provide access to capital-cash flow and security (Houston, 1). With a leveraged buyout comes the buyout tax benefit. It creates a tax shield. “Under the United States tax code, the shield allows companies to deduct interest paid on debt as an expense, unlike dividends paid to equity shareholders, which cannot be expensed” (Houston 1). Basically if you increase your
Now my curiosity was increased by a sense of uncertainty. Would I have a job after the merger? Should I start preparing for a transition career? What was my exit plan should the worst happen? Could this coaching gig be something that might make sense for me?
...n stage, yet firms often fail to recognise or do anything substantial in the post merger stages. Perhaps the reason why this norm is still followed by many organisations is because so much potential, energy and capital is wasted on acquiring the target firm that there is little motivation or initiative left to formulate a plan and implement the union of employees and cultures subsequent to the merger. In the absence of an appropriately designed integration process or its successful execution, mergers and acquisitions will not be able to accomplish their full potential nor will the projected synergies materialise. Therefore, it is necessary to bear in mind that successful mergers and acquisitions are neither an art nor a science, but a procedure and to yield positive results, it is crucial to understand the merger process itself when analysing its effect and outcome.
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.