Mergers and Acquisitions Paper: Financial Analysis for Managers II. FIN/325

Introduction In his 1997 Chairmans Letter to the Sh atomic number 18holders of Berkshire Hathaway Inc., rabbit warren Buffett wrote, In some conjugations, there truly atomic number 18 major(ip) synergies--though often clips the acquirer pays too much to adjudge them--but at other times the cost and revenue benefits that be intercommunicate prove illusory. Of one thing, however, be certain: If a chief executive officer is enthused about a particularly foolish acquisition, both(prenominal) his internal faculty and his outside advisors will come up with whatever projections are needed to justify his stance. Only in fairy tales are emperors told that they are naked. (February 27, 1998, p.17) Buffetts admonition, given in the middle of an unprecedented merger wave (Pitofsky, 1999, para.3) and at a time when the investment association was panning him for rejecting technology ventures (Dominio, March 2000), was an auger of things to come. The family 1998 saw the US$37 jillion merger of WorldCom and MCI Communications, which and so merged with Sprint in a US$129 billion deal, (Wikipedia, 2006) and the CDN$9.9 billion purchase of Bay Networks by Nortel. Both proven to be ill fated. MCI WorldCom declared bankruptcy a a few(prenominal) years later and was purchased by Verizon for a mere US$7.6 billion.

Nortel continued to purchase other companies at a frenzied pace but by 2005 had to require major write up write-downs to disclose that the companies they bought were now outlay only a atom of their purchase price (CBC intelligence information Online, December 2005). Not tout ensemble the mergers and acquisitio ns during that time were frustrated - Toron! to Dominions purchase of Canada Trust, for example - but Buffetts approximation that many mergers were non approached with any critical thought certainly proved to be true. This paper will look at some of the lowering and questionable reasons for mergers and acquisitions. In addition, it will image the impact of mergers... If you unavoidableness to get a full essay, govern it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay