The paper 'Different Types of Acquisitions' is a great example of a business assignment. The acquisition can be defined as a process, mostly a corporate action, where a company buys another company by buying most if not all, of the other company`s shares or ownership stakes in order to assume control of the target firm. Most organizations prefer it being beneficial taking over an existing firm`s operation as a growth strategy rather than expanding on its own. Therefore, acquisitions are usually considered as a growth strategy. It is usually paid in terms of cash or the company`s underlying assets such as shares. One of the possibilities of acquiring a company is where a company can buy another company with cash, stock, or a combination of the two.
Another possibility of acquiring to take place is for a company to acquire all the assets of another company. This is usually common in smaller deals. For example, if company ABC buys all of company XYZ`s assets for cash, company XYZ becomes merely a shell and will liquidate at the end or even enter another area of business. Acquisitions are usually in form of friendly or hostile wherein the friendly acquisition, the targeted firm agrees to the terms and allows the other company to acquire it while in the hostile acquisition, the target firm does not agree to the terms laid by the other firm and hence it will be forced to buy shares of the target firm till it gets the majority stakes.
In either hostile or friendly type of acquisition, the acquiring firm usually offers a certain premium on the market price of the target firm`s shares so as to get the shareholders to sell their shares. Another type of acquisition is a reverse merger, which states that it is a deal which enables a privately owned company to get publicly listed in a relatively short time period.
This type of acquisition called reverse merger usually occurs when a private company that has predicted positively on its decision and is eager to raise financing buys a publicly-listed shell company, usually one with no business ad limited assets. We have observed different types of acquisitions and they are related to merging since it is two firms involved.
However, all mergers and acquisitions have one goal in common; they are all meant to create a synergy that makes the value of the combined firms or corporations greater and better than the sum of the two parts. Once the synergy is achieved, it will determine the success of the merger or acquisition. In our case study, we are going to look at the acquisition of two firms that is American Cables Communications and Air Thread Connections. The latter is the acquiring firm while the former is the target firm. We are going to start by briefly discussing the two firms; American Cable Communications Company was one of the largest cable operators in the United States in the year 2007.
The company has cable systems running through homes, landline telephone subscriptions, video subscriptions, and high-speed internet services and its net worth is 30.9 billion dollars.