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

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

Merger Model

What is the difference between a merger and an acquisition?

Merger Model

What are synergies? What kinds of synergies are there?

Merger Model

Why does goodwill get created in an acquisition?

Merger Model

Walk me through a basic merger model

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

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

Merger Model

Why would an acquisition be dilutive?

Merger Model

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

The ultimate IB interview study guide.

FAQCategoriesAll questionsFeedbackAdd a question
©2022 EBITDOG