10 Terms
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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
Market power
Banking; Mergers & acquisitions
A situation in which the merger of two firms enables the resulting combination to profitably maintain prices above competitive levels for a significant period.
Marketability discount
Banking; Mergers & acquisitions
See liquidity discount. Marketability risk The risk associated with an illiquid market for the specific stock. Also called liquidity risk.
Management entrenchment theory
Banking; Mergers & acquisitions
A theory that managers use a variety of takeover defences to ensure their longevity with the firm.
Management buyout
Banking; Mergers & acquisitions
A leveraged buyout in which managers of the firm to be taken private are also equity investors in the transaction.
Managerialism theory
Banking; Mergers & acquisitions
A theory espousing that managers acquire companies to increase the acquirer's size and their own remuneration.
Management preferences
Banking; Mergers & acquisitions
The boundaries or limits that senior managers of the acquiring firm place on the acquisition process.
Tax shield
Banking; Mergers & acquisitions
The reduction in the firm's tax liability due to the tax deductibility of interest. Technical insolvency A situation in which a firm is unable to pay its liabilities as they come due. Tender offer ...
