know first

• horizontal integration: when a business buys a business in the same industry, to gain control over the whole supply chain.
• vertical integration: when a business owns a business that produces a product that it sells.
• takeover: when one company takes control of another company by buying all its shares
• Investment banks have that mergers & acquisitions (M&A) departments that advise companies involved in mergers and takeovers.
• mergers are where two companies join together to form a new company.
• acquisition is when one company buys another company outright.
• joint venture: when two or more firms agree to work together on a project
• white knight:

  • a company that buys a failing company and turns it around to make a profit.
  • another company that they would prefer to be bought by.
• poison pill defense:

  • a company can use a poison pill to prevent a takeover by a hostile bidder.
  • 'eat me and you'll die'
  • involves issuing new shares at a big discount. This reduces the holding of the company attempting the takeover, and makes the takeover much more expensive.
• Horizontal integration is when a business buys a business in the same industry to gain control of the whole industry.

  Horizontal integration is when a business gets bigger by acquiring competitors in the same field of activity.
• Vertical integration is acquiring companies involved in other parts of the supply chain, usually to make cost savings.
• Backward integration is acquiring suppliers of raw materials or components.
• Forward integration is buying distributors or retail outlets.
• takeover bid: an offer to buy a company's shares at a price higher than the current market price.
• raid: a company buys as many shares as possible on the stock market, hoping to gain a majority.
• friendly takeover: where both firms agree that it would be beneficial to merge
• hostile takeover: where one firm tries to take over another without its agreement
• friendly bid:

  • a bid that is made with the intention of being accepted by the other side.
  • a company's board of directors agrees to a takeover.
• hostile bid: the company does not want to be taken over.
• diversification:

  • the process of a business expanding into new markets or products.
  • a company buys another in a completely different field.