Lesson 22: Mergers

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Vocabulary Builders:
Listen & Read:

Mergers When two companies join together to become one organization
They are merging with the competition.
Acquisitions When a company is bought by another
The company is going through an acquisition.
Operation The activity of a company
The M&A operation will take about three months.
Hostile takeovers When a company does not want to be bought but there is a forced sale
They are expecting a hostile takeover by the competition.
Market The area where business is done
The market is consolidating. There are a lot of mergers and acquisitions going on.
Due diligence To do a corporate analysis
The consulting company has to do due diligence.
Hostile competition Companies that are not friendly in business
There is a lot of hostile competition in the sectors.
Tax management The handling of taxes
The tax management company is taking care of the transaction.
Market competition The competition on the free Market
There is a lot of market competition.
Spin off A part of a company is sold in a spin off (spin spun spun)
The company had to spin off its financing activity.
Stock swap When shares in a company are used for a merger or acquisition
They did a stock swap for the merger.
Branding The activity of making people remember your company or product
Nike is good at branding.

Anti-trust When there is a loss in confidence in a situation
There was an anti-trust law suit over the takeover.
Horizontal merger When two companies join and they have similar products and the same industry
There was a horizontal merger between the two transport companies KLM and Air France.
Vertical merger When two companies join and they produce for different stages of production
The two companies did a vertical merger to compliment their activities.
Economies of scale A larger company saves money because of large volume
They thought the acquisition would improve their economies of scale.
Take over When one company buys another
The take over was quick.
Integration When the new staff from each company is joined
They integrated the companies in 6 months.
Balance sheet The overall position of the company
The balance sheet said they had a lot of cash. They could buy another company.
Market share How much of the market does the company control
They increased their market share by merging with the competition.
Insider trading When executives communicate illegal information about the company performance
They were accused of insider trading during the merger.

Technique builders Numbers
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