Exam 14: External Growth Strategies: Mergers, Acquisitions, and Alliances

In most cases, the primary goal of a strategic alliance is to acquire that than simply to access the partner's organizational capabilities.

The main reason that a strategic alliance is often an attractive alternative to a merger or acquisition is:

A major motive for the acquisition of pubic companies by private equity companies is:

Mergers and acquisitions go in waves.Because acquirers prefer to pay low prices for acquired companies, these M&A waves tend to be inversely correlated with stock market fluctuations.

Strategic alliances are only stable if they are reinforced by equity ownership between the partners.

The main reason that multinational corporations choose t enter emerging markets by means of a joint venture with a local partner is usually the desire t share risk rather than the need to access local knowledge and distribution channels.

Issues of pre-acquisition planning and post-acquisition management should be viewed as separate: activities best led by separate teams.

The "lemons problem" in the market for companies refers to the fact that the sellers of companies have better information about the company than do would-be buyers.

Hewlett-Packard's disastrous acquisition of the software and services company, Autonomy, points to the problem that the acquirer has much less information about the company than the seller.An additional problem of the Autonomy acquisition is that acquisitions that are intended to change the acquirer's business model are riskier than acquisitions that seek to leverage the existing business model.

Mergers and acquisitions are attractive to the managers who instigate them because of the speed with which they can effect strategic changes rather than their proven financial benefits.

Studies that compare post-merger accounting profitability with the pre-merger accounting profitability of the companies involved show little consistency.This is because: it to the companies' performance prior to merging.The problem here is separating The effects of the merger from the multitude of other factors that influence Companies' performance over time.returns fails to provide conclusive evidence on the performance outcomes of mergers and acquisition is that:

For companies that are seeking to augment their own resource and capability base with those of another company, the choice between acquisition and strategic alliance rests primarily upon:

In order to gain a new organizational capability, it is usually cheaper and less risky to acquire a company that already possesses that capability than to develop that capability internally.

Cross-border acquisitions tend to have the strongest strategic logic but give rise to the greatest challenges of post-merger integration.

In the case of cross-border amalgamations of companies, concerns of national domination often mean that mergers are preferred to acquisitions.

Which of the following was not a contributory factor to the success of Disney's post-acquisition integration of Pixar?

Most of the biggest mergers and acquisitions since 2000 have been horizontal-i.e.between companies in the same industry.This reflects the fact that:

Internal business ventures rather than external mergers, acquisitions and alliances are the preferred means by which most established firms achieve major extensions in the scope of their activities.

The transformations of: $\bullet$ Interbrew into Anheuser-Busch Inbev, the world's biggest beer company, $\bullet$ North Carolina National Bank into Bank of America Corporation, the #2 bank in the US $\bullet$ Comcast into the world's biggest media company Are evidence of:

Mergers, acquisitions, and alliances may be viewed not just as instruments of corporate strategy but as strategies in themselves.