• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Why do firms engage in mergers? Describe a recent merger between two firms and identify the reasons for the merger.

Extracts from this document...

Introduction

24th February 2005 Why do firms engage in mergers? Describe a recent merger between two firms and identify the reasons for the merger. In the business world, mergers play a vital role in both helping certain markets remain free, help prevent single firms taking over in a monopolistic manner and allowing struggling companies to find a second chance to succeed. There are mergers happening in and around us day by day and although a majority of the public are unaware of the significance of these manoeuvres, the business world can be greatly affected by such actions. The most famous and possibly the best documented merger in recent United Kingdom History was that of Lloyds Bank and TSB Bank in 1995 to create one of the largest forces in domestic banking with the two super banks along with the acquisition of Cheltenham & Gloucester in the same business year. There are several reasons why firms or businesses merge and several different methods of merging. In the following piece of writing, I will explain why and how mergers take place and the effect of mergers upon the Welsh Rugby Union. Whenever a merger takes place, the merger must comply with the strict regulations of the Competition Commission, an independent board who regulate all mergers to ensure fair trade and acquisitions. ...read more.

Middle

Now that I have examined why and how companies merge together, I will now give and example of a merger that has taken place in recent years and one that is of large interest to myself. In Wales, until October 2003, there were four divisions of professional rugby teams each competing in respective divisions. The teams were all either towns or cities such as Cardiff, Swansea and Llanelli. However, the interest in Welsh rugby dropped due to limited success in all areas. From the period of 1987-2003, the Welsh Rugby Union (WRU) had planned radical changes to promote the game of rugby and "stop the rot" that was occurring in the business side of the game. The Merger was planned for the following reasons: * There was a drop in interest in the game of rugby due to lack of success and in international home matches, an average of 73% attendance was reached, lower than Italy, Scotland, England & France. * Merchandising sales had fallen with replica shirt sales down 37% from 1999-2001 and needed to improve to help boost the economy. * The merger was seen as an ideal way to make use of greater economies of scale. * Improve quality of welsh completion in European competition for greater grants from the International Rugby Board (IRB). ...read more.

Conclusion

* The average attendance for Neath Swansea Ospreys increased from 3'034 in 2001-03 to 4'634 in 2003-04 and is now 6'400 for the 2004/05 season. * On top of this, Welsh regional sides have benefited from qualifying for the quarter final stages of the European Heineken Cup, which offers prize money of over �1'000'000 to the winner. * The increased quality in rugby set-up and profits have allowed more money to be spent on youth development to help the game progress in coming years. * The Welsh national team has moved from being a poor outfit to a side who are on track to win their first six-nations for more than 20 years, a feat that would not have been possible without the mergers between the domestic rugby clubs in Wales. Although the rugby has benefited greatly, the community and spirit in Welsh pubs and bars has sky-rocketed due to the success of the National team. Dave Williams, owner of the New House Inn, Cardiff, Wales commented that: "the supernormal profits that have come about during the last few weeks can only be down to how well the team is performing, every game day the fans are here in there tons and we are taking more in that we would do on New Years Eve." This is conclusive proof of the success of the mergers in Wales and the effect on both the local economy and national pride. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. The Business Environment Coursework. Describe the type of business, purpose and ownership of ...

    In China families look after the older generation. Due to growing population laws have been changed to limit families from having more than one child. This may mean when families grow older there may be pressures on them as there are fewer children to look after the older members of the family.

  2. Vodafone Plc

    Therefore Vodafone's products are at a high quality. This also shows that Vodafone is providing a good working environment for its workers as they are being motivated. The after sales service of Vodafone do not have much queries to deal with because of high quality mobiles and due to 99% coverage.

  1. For my portfolio, I was asked to do an assignment on two businesses. I ...

    The core business activity of tesco is selling food and drink and household consumables to the general public. They are well known in United Kingdom because in United Kingdom many supermarkets such as Asda, Sainsburys, and Safeway etc are involved in the same activities as the business and are involved in providing the same services.

  2. Introduction to J Sainsbury plc

    Sainsbury's need to be able to provide excellent customer service because if they do not and a customer is disappointed with the service, they would not want to come back and shop at the supermarket again. Objective 2: "To provide shareholders with good, sustainable financial returns by focusing on customers' needs".

  1. Tesco financial review

    They will need to ensure that they can afford the repayments and that they are clearly stated before the store is opened. This is because Tesco need to ensure that they are expected to make enough money to reinvest in stock pay off the mortgage and pay wages of the staff at Tesco.

  2. Investigation into Cadbury's Plc.

    There must be a minimum of at least two shareholders but there is no maximum amount. Shares in private companies cannot be traded on the stock exchange, and often shares can be brought only with the permission of the board of directors.

  1. Is Wal-Mart Too Powerful?

    Local Governments Positive Negative * Offers jobs to people of the community. Wal-Mart employs 1.5 million people worldwide1. * Property / Sales Tax Revenues * Persistently asks for subsidies to build, despite being the largest company in the world. * Ability to overturn local laws by lobbying the public with

  2. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    Big business?s such as Tesco?s has its own Public relations department that organises and engages in activities such as charity events, sponsoring sport/ culture events etc. this method of promotion is expensive. Tesco?s uses Public relations as they support and sponsor charities.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work