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16 Cards in this Set
- Front
- Back
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Merger
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The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate identity.
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Consolidation
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A merger in which an entirely new firm is created and both the acquired and acquiring firms cease to exist.
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Tender offer
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A public offer by one firm to directly buy the shares of another firm.
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Proxy contest
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An attempt to gain control of a firm by soliciting a sufficient number of stockholder votes to replace existing management.
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Going-private transactions
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Transactions in which all publicly owned stock in a firm is replaced with complete equity ownership by a private group.
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Leveraged buyouts (LBOs)
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Going-private transactions in which a large percentage of the money used to buy the stock is borrowed. Often incumbent management is involved.
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Strategic alliance
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Agreement between firms to cooperate in pursuit of a joint goal.
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Joint venture
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Typically an agreement between firms to create a separate, co-owned entity established to pursue a joint goal.
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Synergy
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The positive incremental net gain associated with the combination of two firms through a merger or acquisition.
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Greenmail
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In a targeted stock repurchase, payments made to potential bidders to eliminate unfriendly takeover attempts.
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Poison pill
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A financial device designed to make unfriendly takeover attempts unappealing, if not impossible.
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Share rights plans
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Provisions allowing existing stockholders to purchase stock at some fixed price should an outside takeover bid come up, discouraging hostile takeover attempts.
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Divestiture
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The sale of assets, operations, divisions, and/or segments of a business to a third party.
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Equity carve-out
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The sale of stock in a wholly owned subsidiary via an IPO.
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Spin-off
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The distribution of shares in a subsidiary to existing parent company stockholders.
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Split-up
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The splitting up of a company into two or more companies.
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