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

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

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

In technology-based industries,the most common reason for established companies to acquire small,start-up firms is in order to:

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.

The continuing popularity of mergers and acquisitions among companies despite the lack of empirical evidence of their benefits suggests:

The fact that acquisitions impose substantial costs on acquiring firms (including both the acquisition premium and legal and advisory fees)implies that:

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

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.

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.

Strategic alliances frequently play an important role in a firm's internationalization strategy because:

In Capron and Mitchell's decision framework for selecting the right growth path,if a firm finds that its resources and capabilities do not fit with its current strategy,then acquisition should be first option considered and internal development the last option.

What distinguishes a joint venture from other types of strategic alliance is that in a joint venture:

Mergers and acquisitions represent paradoxes in the sense that:

The main parallel between the merger boom in the US at the end of the 19^th century and the recent merger boom in the chemicals,beer,food,media and communications,and pharmaceutical industries is that both involves horizontal mergers and resulted in the creation of market-dominating companies:

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

Which are the following statements about pre-merger planning is untrue?

For acquiring firms,empirical studies show that,on average,the returns to shareholders are:

Acquisition is the preferred mode of diversification for most firms because:

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

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.