Facebook Pixel Code
x
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Mergers and Acquisitions Essay Example

Show related essays

Mergers and Acquisitions

This is a preview of the 6-page document
Read full text

The other theory is the synergistic mergers theory, which holds that firm managers achieve efficiency gains by combining an efficient target with their business and then improving the target’s performance (Stahl and Mendenhall, 2005).In the year 2012, GlaxoSmithKline (GSK) acquired Human Genome Sciences (HGS). GlaxoSmithKline is pharmaceutical giant company based in London and Human Genome Sciences is company based in the United States. Buying Human Genome Sciences gave GlaxoSmithKline full control of lupus drug Benlysta and pipeline drugs; Albiglutide and Darapladib, which the two companies were working on. Human Genome Sciences was not performing well as expected hence they had to let go of some of their employees to reduce its operation cost. It was a difficult move for GlaxoSmithKline to let HGS fail because they were collaborating on making the Benlysta drug, which had taken much longer to start. The offer of GlaxoSmithKline to buy Human Genome Sciences had been rejected hence the hostile takeover process made the longtime partners hate each other at first but later on they decided to work together in peace to find treatment for heart diseases and diabetes. GSK acquired all the outstanding shares of HGS and they started working together, improving people’s life by enabling them to do more, feel better and live longer.Bruner (2011) defined economies of scale as the cost advantage that arises with increased output of a product. Bruner (2011) continued to state that the greater the quantity of products produced, the lower the per-unit fixed costs because these costs are shared over a larger number of goods. The acquisition improved the economies of scale of the businesses because GSK Company was successful and performed even better after acquiring HGS. Together the firm was able to borrow from lending institutions at lower interest rates and the costs involved in the business operation reduced (Brito and Catalao-Lopes, 2006). The merged companies would be able to improve the production of their products and get goods of high quality since the production costs are shared, and hence lower.Albrecht et al (2011) defined economies of vertical integration as a process when a company expands its enterprise into areas that are at different points on the same production path, such as when a manufacturer owns its supplier.

This is a preview of the 6-page document
Open full text

References

Albrecht, W, Stice, K., & Stice, D. (2011). Financial accounting. Mason, OH, South-Western/Cengage Learning.

Brito, D, & Catalao-lopes, M. (2006). Mergers and acquisitions: the industrial organization perspective. Alphen, Kluwer Law Internat.

Bruner, F. (2011). Applied Mergers and Acquisitions Workbook. Hoboken, John Wiley, & Sons.

Buono, F., & Bowditch,L. (2003). The human side of mergers and acquisitions: managing collisions between people, cultures, and organizations. Washington, DC, Beard Books.

Carney, J. (2009). Mergers and acquisitions. Austin, Wolters Kluwer Law & Business.

Center for continuing legal education (American bar association). (2003). Employee benefits in mergers and acquisitions: a publication of the American Bar Association Center for Continuing Legal Education ... [et al.]. Chicago, IL (541 N. Fairbanks Ct. Suite 1600,

Chicago, IL 60611-3314), American Bar Association, Center for Continuing Legal Education].

Coyle, B. (2000). Mergers and acquisitions. Chicago, Glenlake Pub. Co.

Curry, K. (2008). MBA fundamentals: business law. New York, Kaplan Pub.

Daniel, A., & Metcalf, S. (2001). The management of people in mergers and acquisitions. Westport, Conn, Quorum Books.

Emerson W. (2009). Business law. Hauppauge, N.Y., Barrons Educational Series.

Ferenczy, I. (2008). Employee Benefits in Mergers & Acquisitions 2008-09. Aspen Law & Business.

Gaughan, A. (2011). Mergers, acquisitions, and corporate restructurings. Hoboken, NJ, Wiley.

http://www.washingtonpost.com/blogs/capital-business/post/glaxosmithkline-buys-human-genome-sciences-for-36b/2012/07/16/gJQAW9JfoW_blog.html

Kumar, R. (2012). Mega mergers and acquisitions case studies from key industries. Basingstoke, Palgrave Macmillan.

Ilzkovitz F. & Meiklejohn R. (2006). European merger control: do we need an efficiency defence? Cheltenham, Elgar.

Pablo L., & Javidan, M. (2004). Mergers and Acquisitions Creating Integrative Knowledge. Oxford, Blackwell Pub.

Pride, M., Hughes J., & Kapoor,R. (2012). Business. Mason, OH, South-Western Cengage Learning.

Stahl, K., & Mendenhall, E. (2005). Mergers and acquisitions managing culture and human resources. Stanford, Calif, Stanford Business Books.

Straub, T. (2007). Reasons for frequent failure in mergers and acquisitions: a comprehensive analysis. Wiesbaden, Deutscher Universitats-Verlag.

Weygandt J., Kimmel D., & Kieso, E. (2010). Financial accounting: IFRS. Hoboken, N.J., Wiley.

Close ✕
Tracy Smith Editor&Proofreader
Expert in: Finance & Accounting, Marketing, Management
Hire an Editor
Matt Hamilton Writer
Expert in: Finance & Accounting, Macro & Microeconomics, Human Resources
Hire a Writer
preview essay on Mergers and Acquisitions
WE CAN HELP TO FIND AN ESSAYDidn't find an essay?

Please type your essay title, choose your document type, enter your email and we send you essay samples

Contact Us