Impact on shareholder wealth due to steel mergers Essay

Impact on shareholder wealth due to steel mergers - Essay ExampleThe present chapter focuses on the issues of mergers and acquisitions carried out certain companies in order to gain access and diffuse their horizon in the market and thus increasing their productivity as well as income. Shareholder entertain is greatly influenced by on the whole types of mergers and acquisitions. Peter A. Hunt (20046) states that only well conceived and well executed transactions reward the shareholders resulting in an increased stock price. He further states that companies continue to merge with pair or lesser powerful companies and intend to acquire smaller companies in order to increase their shareholder nurture keeping in view their long term management process. It is in any case stated that mergers, acquisition and restructurings are pivotal in building value for shareholders and companys run performance, its capital structure and its public perception are three elements that form the foun dation of shareholder value. (Peter A. Hunt, 2004 4) at that place are many instances when the companies in order to expand their clientele operations have targeted the companies that are running in losses. The process of merger or acquisition creates a huge hara-kiri among the international business community and shareholders which has huge impress on the shareholder value.The primary motive o... A merger is a transaction between larger or equal partners while acquisition is a transaction wherein the larger company takes hold of the smaller company. Successful acquisitions and mergers are intended to increase the profitability of parent sign and stock price. Leeth and Borg in their studies The Impact of Mergers on Acquiring Firm Shareholder Wealth have found that the shareholders of the target company are most benefited. (http//eh.net) To examine this education the present chapter attempts to present an analyses of the data collected from various sources and present statistical details on the merger and acquisitions during few decades that will help to understand the impact of merger and acquisitions on the shareholder value. The data analysis will also help to understand the impact of merger and acquisitions on the shareholder value and also the rate of increase or decrease in the shareholder value of the target firm as well as parent company that has fig up due to the process. Data AnalysisMerger and acquisitions have increased during this time of economic downturn where most of the companys mainly financial institutions are filing for bankruptcy. There are instances when companies in order to avoid bankruptcy have welcomed the decision of being merged with some other companies working in the same float or let the other company acquire it. Recently, the one of the worlds biggest car manufacturer General Motors had filed for bankruptcy. The recession has led to downturn of many big industries all over the world, mainly United States. The diagram 1 belo w shows the details of mergers and acquisitions done in large in some of the countries. Diagram 1 accord to the diagram 1, the companies of United States and Canada are with most