Mergers and acquisitions Coursework Example | Topics and Well Written Essays - 2500 words - 1

Mergers and acquisitions - Coursework ExampleThis paper seeks to examine examples of companies in the USA that were convolute in a nuclear fusion. Mergers often look forward to ensuring moolah rather than losings in the business combination. The selected social club that involved itself in a merger is the Continental Airlines Company. The partnership was involved in the merger with an separate airline business business friendship. The two companies were the entities in the merger. An entity in business or in mergers and acquisitions (M & A) describes the organization, troupe or corporation that is acquired by another organization, company or corporation or that merges with the other in order to ensure a successful business in term of profits, quality of products and ambition and its continuous and long term survival in the worlds competitive markets (Harwood, 2005). In the year 2010, an airline company in the U.S, Continental Airlines, merged or was rather acquired by anot her company, United Airlines (UAL) Corporation, also an airline holding company in the U.S which had its headquarters in Chicago in the state of Illinois. The two airline companies merged to form the United Continental Holdings in October 2010. The merger took place to ensure that the new company founded posed stiff competition to other airline companies around the world. The merge was also to ensure cave in services than the services supportd before by the respective(prenominal) airline companies. After merging, the founded airline, United Continental Holdings became the largest airline company in the world as was confirmed by revenue passenger miles (New York Times, 2010). Mergers and acquisitions are often accompanied by transaction prices and payment harm. At the time of the merger between Continental Airlines and UAL Corporation, in that location were several factors that were involved in determining the transaction price and the payment terms for each of the individual co mpanies after the merger. The first factor that determined the payment terms was the presence of other potential bidders who would provide better payment terms. United Airlines initially held merger talks with the US Air focal points. It is said that a circle was close between the two companies (New York Times, 2010). Unfortunately the merger talks broke off paving bureau for talks between the United Airlines Corporation and other airlines. On the other hand, the Continental Airlines also held merger talks with the Star Alliance and even merged. However the two airlines later on separated. This paved way for merger talks between the Continental Airlines and the United Airlines Corporation. Better payment terms were put in place bearing in mind that there were other potential bidders in case of a break off of the merger talks. The second factor that determined the transaction price and the payment terms between the two companies was the share potful that was signed by both entitie s. When the United Airlines and the Continental Airlines inform their merger in 2010, they struck so many deals. One was of a new name of the company to be formed which was named the United Continental Holdings. Secondly, the two companies struck deals to share the losses and profits. This share deal was the key factor which was strongly involved in determining the transaction price and payment terms during their merger. The third factor that determined the transaction price and the payment terms was the taxes to be imposed on the newly formed company by the US government. Taxes imposed on a certain company greatly influences the payment terms. In case of friendlier taxation, the two entities could enjoy sharing in large amounts of the profits incurred. However, in case of harsh taxation by the US governm