Mergers & acquisitions

Mergers & acquisitions

Referring to the aspect of corporate strategy, finance and management that deals with the buying, selling or combining of different companies that can assist a growing company to grow rapidly without having to create another business entity.

Industry: Banking; Business services

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Mergers & acquisitions

Vertical merger

Banking; Mergers & acquisitions

One in which companies that do not own operations in each major segment of the value chain choose to backward integrate by acquiring a supplier or to forward integrate by acquiring a distributor.

Voluntary liquidation

Banking; Mergers & acquisitions

Sale by management that concludes that the sale of the firm in parts could realise greater value than the value created by a continuation of the combined corporation.

White knight

Banking; Mergers & acquisitions

A potential acquirer that is viewed more favourably by a target firm's management and board than the initial bidder.

Zero-growth valuation model

Banking; Mergers & acquisitions

A valuation model that assumes that free cash flow is constant in perpetuity.

Winner’s curse

Banking; Mergers & acquisitions

The tendency of the auction winners to show remorse, believing that they may have paid too much.

Voluntary bankruptcy

Banking; Mergers & acquisitions

A situation in which the debtor firm files for bankruptcy.

Dissident shareholders

Banking; Mergers & acquisitions

Those that disagree with a firm's incumbent management and attempt to change policies by initiating proxy contests to gain representation on the board of directors.