Merger and Acquisitions Research Paper Example | Topics and Well Written Essays - 750 words

Merger and Acquisitions - Research Paper exercisingFor Nvidia to acquire some other bon ton or merge with some other formidable telephoner to play synergy in the operations, which cut down on operating cost, improve market penetration, or enhanced scale of operations could be a good picking. There ar many companies that Nvidia whitethorn think of merging to increase the value of its stockholders however, AMD will be a finest choice for merger all over any other company. Nvidias old foe ATI was acquired by AMD since then AMD has been most formidable competitor to Nvidia. A good synergy bed be achieved by merging these two companies. AMDS revenue at $6.5 billion is almost double of Nvidias $3.5. Operating margin is almost matching at 6.25%. Merger can bring about the cost cutting in managerial and other staff cost. Unnecessary challenger in many product lines can be eliminated and better harm realization can be achieved. Their mergers will better be able to face competition from much larger corporations such as Intel. In the process merged entity will set out higher price-earnings ratio in the market bum leading to higher share price. (Investopedia.com) Answer 2. The AMDs market capitalization is $5.25 billion, which is almost half of Nvidias market capitalization of $10.45 billion. ... This is too known as Fixed-Shares Stock offered to the shareholders of the company being merged. Thus, the company also saves on taxes as no cash outgo has taken place. The basis of ratio could be a current market price. This would not make any financial burden on Nvidia and merged entity would have increased outstanding shares with enhanced revenues and profits. It may happen that initially Nvidia share price may fall upon southward but within 2-3 quarters when synergistic emergences start percolating on the merged entity, price of Nvidia will start moving up fast. The agreed ratio will have some effect on price of AMD share but that will get stabilized soon. (Exp ectationinvesting.com) Answer 3. There are some other companies that can be merged with Nvidia as second or third choice for mergers. Gaughan, (2001) has rightly pointed out that merger should be able to integrate the operations of both the companies, otherwise it would be simply a leveraged buyout and that may fail to bring any effective outcomes that are envisaged with any merger. Xilinx Inc. (XLNX), a California based company, being in the allied field and complementary to the Nvidia business line could be a good choice for merging with the Nvidia. Xilinx Inc., offering programmable logic solutions in the form of advanced corporate circuits, could provide a good fillip to Nvidia in terms of business growth and can bring some level of synergy into certain functionality. Xilinx Inc., with market cap of 8.91 billion and operating margin of 34% that generates operating cash flow of 724 million in 12 months is a cash rich company to merge with Nvidia. (Source http//finance.yahoo.com) Microchip Technology Inc. (MCHP) is