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    2 Forms of Corporate Restructuring

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    Ali Asgher
    The document outlines several forms of corporate restructuring: 1) Mergers can take the form of amalgamation, where two equal firms combine to form a new entity, or absorption, where a large firm takes over a smaller one. 2) Equity alliances involve one firm taking a controlling stake in another through a partial takeover or tender offer. 3) Asset acquisitions involve buying another firm's tangible or intangible assets.

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    2 Forms of Corporate Restructuring

    Uploaded by

    Ali Asgher
    14 views8 pages
    The document outlines several forms of corporate restructuring: 1) Mergers can take the form of amalgamation, where two equal firms combine to form a new entity, or absorption, where a large firm takes over a smaller one. 2) Equity alliances involve one firm taking a controlling stake in another through a partial takeover or tender offer. 3) Asset acquisitions involve buying another firm's tangible or intangible assets.

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    The document outlines several forms of corporate restructuring: 1) Mergers can take the form of amalgamation, where two equal firms combine to form a new entity, or absorption, where a large firm takes over a smaller one. 2) Equity alliances involve one firm taking a controlling stake in another through a partial takeover or tender offer. 3) Asset acquisitions involve buying another firm's tangible or intangible assets.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    14 views8 pages

    2 Forms of Corporate Restructuring

    Uploaded by

    Ali Asgher
    The document outlines several forms of corporate restructuring: 1) Mergers can take the form of amalgamation, where two equal firms combine to form a new entity, or absorption, where a large firm takes over a smaller one. 2) Equity alliances involve one firm taking a controlling stake in another through a partial takeover or tender offer. 3) Asset acquisitions involve buying another firm's tangible or intangible assets.

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    of 8

    FORMS OF CORPORATE RESTRUCTURING

    Dr.Ambuj Gupta

    Mergers
    Amalgamation vs. Absorption Amalgamation: A+B=C Firms of equal size A new firm comes into existence Absorption: A+B=A Fusion of small company with a large co. Smaller company ceases to exist. Complete Takeover

    Equity Alliance

    A+B=A1+B No one loses entity A controls the affairs of B A change its status to A1(holding company) A purchases controlling shares of B Partial Takeover/Equity Alliance Generally through Tender Offer

    Assets Acquisition
    Buying assets of the other firm May be tangible assets like a manufacturing unit or intangible assets like brands.

    Spin-offs
    (A-a)+(B-b)=A+B+C, where A>a,B>b & C=a+b A small business a is divested from the entity A A small business b is divested from the entity B The two divested businesses a and b are combined to form a new entity c. *Existing shareholders gets shares in pro rata basis in the new entity.

    Divestitures
    Sale of a portion of the firm to an outside party. Results in infusion of cash to the parent co. Selling undervalued business/nonstrategic or unrelated/use the proceeds to fund investments in a potentially higher return opportunities.

    Equity Carve-outs
    A transaction in which a parent firm offers some common stocks of its subsidiary to the public to bring in a cash infusion to the parent without loss of control.

    Leveraged Buyout
    Financing technique where debt is used in the acquisition of a company. Purchase of equity interest in a public entity to convert it to private entity.

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