The going concern value is estimated based on "incremental fee cash flows to the bidding firm as a result of the merger or acquisition. Riordan pays six and a half times the amount of interest on existing liabilities to taxes; this means that with the tax incentives Riordan will gain it can invest in six other profitable entities.
Threats Riordan Manufacturing has a very big threat that comes with this acquisition and with any business merger. Major reasons of mergers and Acquisitions? Weaknesses should be looked at in order to convert them into strengths.
Rapid rise of educationalacquisition which leads to high investments. Rather than relying on partners or new joint ventures for robust production and delivery, Riordan will now expands its own and thus be able to determine future product directions.
There are also other factors to include with regards to the acquisition. Expanded operations translate to more manufacturing hours, bigger warehousing capacities, and more effective logistics system.
Mergerstat has a merger database. The value of acquired firm depends on number of elements such as: The most difficult factor for the merger comes from within the Riordan family of companies. Capitalization on Unused Debts.
Strengths The strengths that Riordan Manufacturing could be gaining from the acquisition would be total control of the company, acquiring stock for a minimal price and reducing overall debt. B SWOT provides instant review for each personality. It would not be unexpected for plastic manufacturing competitors to aggressively target the new merged organization in many ways, direct or indirect.
The target company can dissolove and operate under the acquirer name. To fill the large gap of planned and achieved growth. A serious opposition to the merger can be the management, labor unions, the existing shareholders of the target firm, vendors, and competition. Tax reduction through a merger is in fact creation of wealth.
There are certain benefits that can be derived from merging and acquiring a comany. Riordan can control more assets for less money through the merger than if it was to acquire those assets any other way.
Strengths, Weaknesses, Opportunities, and Threats Analysis A definitive parallel acquisition by Riordan Manufacturing provides an example of the ongoing consolidations in the plastic manufacturing industry. SWOT analysis can be a useful way of summarizing the relationship between environmental influences and core competencies and hence framing the agenda for developing new strategies.
Management and labor unions may oppose the merger because they perceive their elimination to be inevitable. As a result, other competing companies may file antitrust lawsuits or help the target firm submerge from financial stress on terms of turning down acquisition opportunities.
To improve the position in the market. SWOT analysis can be extremely beneficial to those who objectively analyze their company.
Merger refers to combination of two entity through mutual negotiation to form a third company also known as a Merger of Equals. Reduction in Bankruptcy Costs. This value is closely tied to the replacement cost of the assets. Strengths, weaknesses, opportunities and threats, where strengths and weaknesses are analyzed from an internal prospective and opportunities and threats are viewed from an external perspective.
Second, the parent company may oppose the merger. Typically in mergers there are two tax advantages, but Riordan has three tax advantages:The fall in spending may portend more mergers in the future.
The Democratic Republic of Congo’s Mines Minister announced that Ivanhoe would have to seek approval of its sale of copper assets to Zijin Mining. SWOT Analysis Final - Download as Word Doc .doc), PDF File .pdf), Text File .txt) or read online.
This recent pullback could spur greater mergers and acquisitions activity given that junior miners now have more attractive valuations. Suki Cooper, precious metals analyst at Standard Chartered, says that gold could rally after seeing a weak second quarter.
Mergers and acquisitions Benefits of a merger or acquisition There are many good reasons for growing your business through an acquisition or merger. These include: • Obtaining quality staff or additional skills, knowledge of your industry or sector and other business intelligence.
Merger Acquisition SWOT Analysis for Riordan Manufacturing Merger Creates Wealth For Riordan Manufacturing to gain from a merger it has to create synergies. Synergies are anticipated benefits from the merger.
Johnson and Scholes () believed a SWOT analysis was an effective method isolating the opportunities gained from a merger. Indeed such an analysis portrayed that the merger would allow massive market power .Download