Merger & Acquisition
What are mergers and acquisitions in CAPEX
We at CAPEX do understand how various types of financial transactions including mergers, acquisitions, consolidations, tender offers, assets acquisition and acquisitions for management do take place.
The essence of the merger & acquisition
The terms merger and acquisition are often used interchangeably, although in reality they have a slightly different meaning.
What we do
When one company passes into the ownership of another person and asserts itself as a new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer absorbs the business, and the buyer’s shares continue to be traded, while the shares of the target company cease to trade.
As a result of a simple acquisition, the acquiring company receives a controlling interest in the acquired company, which does not change its name and does not change its legal structure.
On the other hand, the merger describes two firms of having approximately similar equation, which join forces to move forward as a whole, and not to remain separately owned and managed. This action is known as the “fusion of equals.” The shares of both companies are being leased and new shares are issued in their place. Case in point: Both Daimler-Benz and Chrysler ceased to exist when the two companies merged, and a new company was created, Daimler Chrysler. A purchase transaction will also be called a merger when both CEOs agree that the merger is in the interests of both companies.
Consolidation creates a new company. Shareholders of both companies must approve the consolidation. After approval, they receive ordinary shares in the new firm. For example, in 1998, Citicorp and Traveler’s Insurance Group announced a consolidation resulting in Citigroup.
When acquiring assets, one company acquires the assets of another company. A company whose assets are acquired must be approved by its shareholders. The purchase of assets is a typical bankruptcy procedure when other companies file applications for various assets of the bankrupt company, which is liquidated upon the final transfer of assets to the acquiring firms.
CAPEX M&A Experience:
Typically, a merger can be structured in various ways, based on the relationship between the two companies involved in the transaction
Horizontal merger: two companies that are in direct competition and use the same product lines and markets
Vertical merger: customer and company or supplier and company. For example, a cone-shaped ice cream cone supplier merging with an ice cream maker
Related mergers: two enterprises that serve the same consumer base in different ways, for example, a TV manufacturer and a cable company
Merger with market expansion: two companies that sell the same products in different markets
Merging of Products
And extensions: two companies selling different but related products in the same market. Conglomerate: two companies that do not have common business areas.
Generating New Ideas
Solving Big Problems
CAPEX prepares financial statements as per International Financial Reporting Standards (IFRS)
Why we are different
Both companies involved in mergers and acquisitions will evaluate their performance differently. The seller will obviously evaluate the company at the highest possible price, while the buyer will try to buy it at the lowest possible price. Fortunately, there is a company CAPEX, which will help companies objectively evaluate all indicators.
Our Latest Clients
Established in 2012, CAPEX Auditing is a leading independent financial consultancy firm based in United Arab Emirates.
CAPEX specializes in outsourced accounting services. Delivered by a professional team of accountants, we can address your accountancy needs with our incredible knowledge, experience and expertise. When you partner with CAPEX for your accounting requirements, your business can achieve a competitive edge, improve the management of various financial aspects, improve your bottom line and integrate value added services. As a trusted firm, CAPEX is dedicated to helping small to large companies in reaching every financial success.
- Auditing – 90%
- Consulting – 60% +
- Accounts Management – 55% +
- Tax Consultancy – 50% +
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Get in touch
Mitch is an Audit & Assurance Partner in our Dubai office with over 13 years of experience in the profession.
Eduard specializes in advising clients, supporting them with complex transformation programs and largescale capital projects.