Mergers & Acquisitions Paper Essay

Mergers and acquisitions is an important aspect of corporate strategy, finance and management. This is done with the buying, selling, dividing and combining of divers(prenominal) companies and similar entities. It can help an enterp dress up grow rapidly in its sector as healthy as the impertinently sector it just acquired without the hassle of creating a subsidiary from scratch. This activity is on the rise instaurationwide. According J. Finnegan in Global Mergers and Acquisitions Activity Continue to Rise article, this increase has been accompanied by the authorize of mega-deals (value exceeding $10 billion) driven primarily by large multinational corporations flush with cash in the U.S. Two of the biggest acquisitions in 2012 are from the zip Industry and Tech industry where Duke cogency Corporation acquired get up Energy Inc. and Google acquired Motorola Mobility.I) Duke Energy Corp. acquired Progress Engergy Inc.According to Yahoo finance, in the first case in the musc le industry, when the merger was announced on January 10, 2011, the transaction value totaled $26 billion, including Progress Energys debt. Currently based on Duke Energys dower price and including Progress Energys debt, the transaction is valued at about $32 billion. Duke Energy Corporation (DUK) announced that it has acquired Progress Energy Inc., effective July 2, 2012. The original Duke Engergy includes Duke Energy International, which operates power plants in Central and South America Duke Energy Renewables, which develops and owns fart and solar projects in the U.S. and Duke Energys Midwest generation and Duke Energy Retail, which generate, market and sell electricity in the Midwest.Now, the new entity has nearly $49 billion in market capitalization, total assets more than $ atomic number 6 billion and 7.1 million electric users in the Carolinas, Florida, Indiana, Kentucky and Ohio. The transaction makes Duke Energy the largest U.S. utility and increases its ability to buil d new power plants to meet future greenhouse-gas emissions limits. Earlier, Chicago-based Exelon Corporation (EXC) was the largest U.S. utility. The new company would be k like a shotn as Duke Energy with headquarters in Charlotte, and substantial operations in Raleigh, North Carolina. Duke Energy would trade on the vernal York Stock Exchange under the symbol DUK. Pursuant to the merger deal, Progress Energy has become a wholly owned direct unit of Duke Energy. On a standalone basis, Duke Energy had an adjust earnings per share guidance range of $1.40 $1.45 for 2012.Under the terms of the merger agreement, each share of Progress Energy earthy clove pink has been converted into the right to receive 0.87083 shares of Duke Energy common stock. Due to the effect of the 1-for-3 reverse stock split, which was consummate related to this merger transaction, this guidance range is the equivalent of $4.20 $4.35 per share. The combined company continues to target 2012 adjusted earnings per share range of $4.20 $4.35. The reverse stock split is designed to reduce the number of big Duke Energy shares. The merger is expected to keep the companys long-term goal of 4% 6% growth in good shape. Overall, their strong balance sheet, ongoing capital expansion projects and an above just dividend yield are very good signs that this merger and acquisition is working well for them.II) Google acquired Motorola MobilityOne of the worlds most valuable brand name in the tech industry is Google, Inc. a ti valley native company. Founded in 1988 out of a garage, it has now become the largest and most popular essay engine on the Internet. Its strong growth is credited to its creative, think outside the box and risk-taking culture. In new-fangled years, it has been involved in a lot of new ventures and mergers and acquisitions with different industries to expand its operation. One of its new ingathering is the Android operating system offered for free to smartphone manufacturer s to compete with the Apple iphones iOS system.Google has also been trying to take and release its own smart phones but hasnt met much success. In addition, it is facing the risk of legion(predicate) lawsuits relating to pattern with Apple. So in smart and bold move, Google has decided to acquire phone maker Motorola Mobility and completed this deal in May 2012 for a whopping $12.5 billion which makes it the largest Google acquisition ever This will unimpeachably push it deeper into the fast growing cell phones industry.Motorola Mobility used to be a strong player in the cell phone industry but in recent years, it has struggled and suffered constantly. As its line of smartphones has waned in popularity, Motorola Mobility has suffered losses totaling $1.7 billion during the past three years while Google has earned atotal of $25 billion over the same stretch. The acquisition is largely a defensive one from Googles perspective. Google needs Motorolas trove of 17,000 cellphone paten ts (plus an extra 7.500 that are awaiting approval) to defend Android phones against lawsuits by Apple, which accuses them of copying iPhone features. Its now playing in Apple territory.Buying Motorola gives Google the ability to control both hardware and software, by reservation its own integrated smartphones and other devices. Under the term of the acquisition, Google will acquired all outstanding common shares of Motorola for $40 per share and transaction costs were $50 million. Out of the 12.4 billion total purchase price, goodwill takes up to $2.6 billion, patterns takes up to $5.5 billion with only $670 million to other net assets.Although it initially was drawn to Motorola Mobility for its patents, Google has been signaling lately that it has been drawing up more ambitious plans for Motorola Mobility. Besides producing smartphones and tablet computers, Motorola Mobility also makes cable-TV boxes that could provide Google with a springboard for delivering more of its service s, including advertising, to living rooms.ReferencesGoldman , David. Google seals $13 billion Motorola buy. 22 2012 n. page. Print. .Google completes $12.5B acquisition of phone maker Motorola Mobility after mainland China clears deal . 22 2012 n. page. Web. 25 Oct. 2012. .Finnegan, Jim. Global mergers and acquisitions activity continues to rise. 24 2011 n. page. Web. 25 Oct. 2012. .