Vodafone Merger Essay

673 Words3 Pages
Wherever you go, the network follows! Hutch’s famous punch line which was adapted appropriately in its much loved advertisement turned out to be quite a pun as the ‘Merger&Acquisition‘ bug followed and finally caught up with Hutch! Following an entire battle of give and take, Vodafone acquired Hutch for a whopping 10 billion USD! Most of us would be wondering, that why at all a company should acquire a rival? What are the gains and risks involved in the entire transaction and how are mergers different from acquisitions? A Merger, as the name suggests occurs when two companies go ahead and merge into a bigger company, mostly under a different name. This is often a result of stock swap, which takes place when two companies agree to share the risks involved in the deal. A merger might resemble an acquisition, it is indeed quite similar, but it is named so in most cases due to political and marketing reasons to avoid media frenzy. Well, obviously a company acquires the other or two companies merge together to accelerate their growth without having to create a separate business entity. An acquisition, as opposed to a merger, can be friendly or hostile. If a company buys the shares of the other company without prior knowledge, it is a hostile takeover. However if both companies cooperate and reach at a final stand, an acquisition can be friendly. Coming back to the Hutch and Vodafone instance, which was a friendly acquisition, it is seen that a lot of expenditure is involved in such deals. When a company decides to take over the other, several factors need to be kept in mind. Considering that such actions are taken to increase the popularity, growth and market reach of a brand, one has to be aware of the consequences of the deal. How much technological know-how and expertise exists with the company to actually go ahead and ensure such a process. Mergers and

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