单选题
Mergers and acquisitions simply mean that one company would attempt to take over another by gaining enough of its common stock to gain control. In the simplest sense, merger means two companies becoming one with the acquirer being in the commanding position.
Mergers come in one of several distinct forms. A horizontal merger brings together two companies in a similar industry--two steel companies for example. A vertical merger brings together two companies in related industries. A steel company taking over an energy producer such as a coal mine would be an example. An automobile producer taking over a parts manufacturer is another. In either case, the merger is designed to produce a synergy between the two companies that did not exist before. The horizontal merger should produce greater scale and efficiency, avoiding duplication of products and production. Both bring together companies related either directly or indirectly.
Another type of merger, or takeover as the case may be, is the merger of two unrelated companies. This is known as the conglomerate merger--a company purposely buying another not engaged in the same business at all. This sort of merger and the companies it creates-- conglomerates--were originally conceived to serve as hedge against changing economic climates.
Leveraged buyout (LBO) is the purchase of one company by another using mainly borrowed funds.
Generally most M&A activity involves one company buying another, taking it out of the public marketplace. On occasion, the management of a company will itself tender for the outstanding shares of a company, accomplishing the same ends. This type of privatization is referred to as a management buyout, or MBO.
Acquisitions are classified as either friendly or hostile, depending upon the reaction of tile target company"s directly to the proposed bid. If management remains opposed and attempts to dissuade shareholders from accepting the offer of the acquirer, the proposed purchase price is known as a hostile offer, as opposed to a friendly offer if they agree to the terms and conditions. But it should not be assumed that all hostile bids will be successful. Target companies can mount expensive defenses to ward off unwanted suitors, although the costs can be quite high. Some of those defenses are also products of the 1980s and are equally or more famous than some of the financial engineering techniques developed during the same period.