Question:

What are some reasons for why a company would want to acquire another company?

Bookmark
Remove Bookmark
Hide answer
Show answer
Answer hidden.

Answer:

There are many possible reasons for why a company would want to acquire another.

  • The buyer's growth may have stalled and they need to "buy" growth by acquiring a faster growing company
  • The buyer may want to gain market share by acquiring one of their competitors
  • The buyer may believe they can achieve significant revenue or cost synergies that will make the deal accretive for its shareholders
  • The buyer may want to acquire the seller's customers to up-sell and cross-sell to them
  • The buyer may believe that the seller is undervalued and therefore can acquire it for a discount to its true value

Other

Merger Model

Merger Model

What is the difference between a merger and an acquisition?

Merger Model

In an all-stock deal, how can you quickly tell if a deal will be accretive or dilutive?

Merger Model

Is there a shortcut to determine whether a transaction is accretive or dilutive to shareholders?

Merger Model

Why would an acquisition be dilutive?

Merger Model

Walk me through a basic merger model

Merger Model

Why would a strategic acquirer typically be willing to pay more for a company than a private equity firm?

Merger Model

A company with a higher P/E multiple acquires one with a lower P/E multiple. Is this deal accretive or dilutive?

Merger Model

What are synergies? What kinds of synergies are there?

Merger Model

Why does goodwill get created in an acquisition?

The ultimate IB interview study guide.

FAQCategoriesAll questionsFeedbackAdd a question
©2022 EBITDOG