Finally, Google has already made inroad into the market by pursuing its own coupon business and, under the above circumstances, would probably find it less expensive and more profitable than purchasing Groupon Lachapelle, As a result, the CEO of Groupon was fired with a very lucrative exit financial package.
Consider this from the point of view of whether or not such an acquisition would be a profitable undertaking that would add value to the shareholders of two corporations Google and Groupon.
The main focus of this assignment will be answering the questions above and the questions in part I.
In addition, successful mergers also involves the elimination of power struggles and Potential pitfalls — might the combined entity actually be less profitable than either company operating independently?
Now to why the offer from Google was declined. While a Google acquisition would lock in some upside, it would also cut the investors out of what might have been quite a bit more.
It is the second largest discount retailer behind Walmart. Finally, this paper will make a recommendation to Goggle and Groupon on the best course of action for a merger or acquisition.
Now to why the offer from Google was declined. Comparative Ratios - The following are two examples of the many comparative metrics on which acquiring companies may base their offers: Should the project be accepted?
Again, Groupon declined this offer. Unless there is a comparison between two mutually exclusive projects, any project with a positive NPV should be accepted. Positively, acquisition of Groupon would mean: Furthermore, there is considerable risk that their two separate corporate cultures will not allow Google to readily absorb Groupon McClure, Mergers and acquisitions: While Groupon shareholders certainly gain in the short run they might feel that they are missing out on potential long-term gains as well.
While Google is definitely a better-run company than Groupon…. As with many financial transactions, the time value of money is also a factor.
However, there is a strategic point-of-view at work here. Consequently, the possible gains from acquiring Groupon cannot be denied.
This can be slow and ineffective if a firm is seeking to take advantage of a window of opportunity in which it has a short-term advantage over competitors. Does the target company have solid growth prospects or at least generate solid profits and cash flow? An equity deal would be better for Groupon shareholders because they would then receive some of Google's upside value.
Google shareholders have potentially little to gain and more to lose. For this assignment, do some research concerning the arguments both for and against such an acquisition from a financial perspective.
As with many financial transactions, the time value of money is also a factor. The Board of Directors of Groupon decided that the potential for an antitrust action was so great that it made the deal not worth pursuing, even though Groupon as a firm stood to increase their wealth by billions of dollars.Net present Value, Mergers and acquisitions FIN - Strategic Corporate Finance Net present Value, Mergers and acquisitions To start I would like to explain the difference and meaning of the present value of the future cash flows from an investment and the amount of investment.
Present value of the expected cash flows is computed by. Mergers and Acquisitions: Conclusion In a merger or acquisition transaction, valuation is essentially the price that one party will pay for the other, or the value that one side will give up to.
Mergers and Acquisitions: Conclusion In a merger or acquisition transaction, valuation is essentially the price that one party will pay for the other, or.
[pewslideshow slidename=anim2] Net Present Value, Mergers, and Acquisitions. Module 5 Case Assignment has two parts. Part I of this case assignment is related to capital budgeting decision and part II is about mergers and acquisitions. Question Net present Value, Mergers and acquisitions.
One financial goal of financial managers is to maximize the shareholders’ wealth. Therefore, merger and acquisition decisions should be consistent with shareholder wealth maximization criteria, and financial characteristics of the targets should be considered in the decision-making process.
Rumors about potential mergers and acquisitions are often a hot topic in the business press and there have been rumors that Google is considering acquiring Groupon.
As you know, mergers and acquisitions can potentially bring.Download