Page 8 - MAC4861_2 Finance class slides part 2 - 4. Mergers & Acquisitions (UNISA)

MERGERS & ACQUISITIONS

Corporate restructuring background

• Business entities often restructure their operations,

assets, financial or legal structure – in a process called

corporate restructuring (see diagram) – with the aim of

becoming more successful or to better serve their

corporate strategy.

• Instead of growing organically, a firm can sometimes

achieve faster growth, especially in a new market, by

expanding through a merger with or acquisition of

another firm.

• Sometimes, changing circumstances, including

changing economies and strategies, dictate that a firm

divest itself of certain subsidiaries or interests.

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