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Managing a Business/Mergers and Acquisitions.

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QUESTION: Dear David

http://en.wikipedia.org/wiki/Mergers_and_acquisitions


Examples :

1. Company A has been acquired by Company B.
2. Company A has been merged with Company B.

From the Employees perspective who are working in Company A, which among the two i.e. Acquisition OR Merger could be more risk prone from Job security point of view ?.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

ANSWER: It really depends on the facts and circumstances of the transaction. I don't think either one is inherently more risky for the employees of Company B.    

---------- FOLLOW-UP ----------

QUESTION: Dear David

Thank you.

Can there be scenarios where mergers or acquisitions can take place between more than two companies  ?.

i.e. n > 2 where n = Company / Organisation / Corporate / Firm.

Example : n = 3

1. Company A is merged with Company B and Company C.

Company A is the Parent Co.

2. Company A acquires Company B and Company C.

Company A is the Parent Co.


In reality, Can this business transaction/s take place (n>2) ?.

i.e. 1 or 2 can also happen ?.

Or

Mergers and Acquisitions will always hold true for the equation n=2.


The following mentioned below are just hypothetical examples.

DaimlerChryslerAudi
MercedesBenzNissan
The Bank of Tokyo-Mitsubishi UFJ-HSBC Bank plc

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

Answer
Anything is possible and it has probably happened in the past, but it is highly unlikely. M&A between 2 companies is difficult and often fails, so I believe M&A involving 3 companies is even riskier. There may be occasions when a company that is doing consolidation acquisitions sometimes called a roll-up (buying small companies within the same industry) where 2 companies may be acquired at approximately the same time.  

Managing a Business

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David E. Coffman CPA/ABV, CVA

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General questions about small business management, planning, and measuring and improving business performance. Specific questions about what a business is worth.

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Certified Public Accountant, Accredited in Business Valuation (ABV) and Certified Valuation Analyst (CVA). Over 30 years experience advising, owning and operating small businesses. Specializing in business valuation and innovative consulting services for small businesses since 1997.

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