Explain new approaches in respect of how a firm could finance takeover Essay

Explain new approaches in respect of how a firm could finance takeover and acquisition. Identify issues with such approaches, f - Essay ensampleThe strategy adopted by each group is prepared by the management accounting department by analyzing the market, shareholders and the regulatory framework within the industry. In some instances, it may be important to obtain synergies to help analyze the financial and accounting policies applied by each of the companies merging. Although the A&M started in 1980s, the international rate of industrial mergers and takeovers took place during the 1990s. However, the complexity and nature of international operations coupled with other complexities has sophisticated global takeovers and mergers. Mergers and acquisitions normally abbreviated as M&A refer to the corporate strategy aspect, management dealing and corporate finance that involve the selling and buying as well as combining and dividing of different companies aimed at assisting an enterpr ise grow in its location or sector or venture into a new location or field (Brealey and Myers, 2000, p 89). Such a growth is expected to be without subsidiary, use of joint venture or child entity. Over the years, the distinction amongst acquisition and merger isblurred with several aspects especially economic in move into. Shareholders lawsuits are common in the event that a firm opts to engage financially in an acquisition or takeover and is appreciated as being part of the current market now that they are meritless. Merger lawsuits frequency has increased in the recent years with their life cycle undergoing a complete change. These days, once a merger deal is closed, lawsuits are normally closed. However, some plaintiffs have come out strongly in mergers to refine the way they operate. They insist on keeping such litigation alive even after they have been closed. This is achieved through having extensive discovery more so against the acquirer executives in control of the purse s trings. Why mergers and takeovers There are a number reasons cited by firms for mergers and takeovers. However, the virtually prevalent reasoning cited by majority of the firms participating in M&A is profitability and growth sourced from external means. The outsourced growth may be of expectant economic benefit to the acquirer through increase in the production capacity, product diversification, increased market share, and expansion of the product lines. Some firms cite quantitative reasons such as tax advantage and increased economies of scale are the main reasons for the mergers. In laying the strategies for merger and takeovers, it is important for the participating firms to focus on their goals and strategies. The management accounting department of the merging firms observes the compatibility of the merging companies to determine the compatibility of the core take accounts and beliefs of these corporations. While quantitative variable provide ideal aspects which makes take overs and mergers very attractive, their pertinency are limited as they fail to portray the clear picture of the scene. Qualitative factors of the merging corporations should also be deeply considered. In estimating the real value of each merging firm, intangible factors such as favorable location, the strength of management, and skilled labor force constitute the qualitative aspects of the takeover or merger. any(prenominal) the goal or rationale of the merger, the failure or success of