Corporate Mergers. Mergers The joining together of two or more companies to form a single company.

Corporate Mergers

Mergers The joining together of two or

more companies to form a single company.

Horizontal Merger two companies that both make the same

product and join together.

Ex: Sprint and Nextel

•Reasons for horizontal mergers:

1. Increase customer base

2. Shared technology

3. Cut costs

Antitrust laws

Sometimes the government will stop horizontal mergers because it might create a monopoly.

Sherman Antitrust Act (1890) the first law that banned mergers and monopolies that limit trade across states. It gave the government the power to stop cartels and monopolies.

In 2011 the government denied the coorporate merger of AT&T and T-

Mobile, as they felt that the new company would have too much of the market

share.

“The merger, announced Feb. 14, would cost $1.2 billion in one-time costs but would generate $1 billion annually in new savings and added revenue”

Merger of American Airlines and US Airways to form the nation's largest carrier.

"Expanding our network for the benefit of our customers, our employees, our shareholders and our communities was the motivation for bringing these companies together," - Stephen Johnson, executive VP

Critics of the merger argue that the new company may be too powerful. Others argue that the merger is unnecessary, and will create no economic stimulation or benefit for the consumer.

Vertical Merger

a joining of two or more firms that are involved in different stage of producing the same good or service .

Ex: A furniture manufacturer buys a lumber mill

• Vertical mergers cut costs and increases efficiency.

Conglomerate

a combination merging two or more totally unrelated businesses

Conglomerates are made to increase profits.

Name the Conglomerate

• This company produces:

1. Grand pianos

2. Jet skis

3. Stereo equipment

4. Motorcycles

Name the Conglomerate

• This company produces:

1. Swimming pool plaster

2. Air filters

3. Staplers

4. Post It notes

Name the Conglomerate

• This company produces:

1. Men’s razors

2. Laundry detergent

3. Batteries

4. Diapers

Proctor & Gamble

Vocabulary words Zoning Laws: law in a city that designates

separate areas for residency and for business

Multinational corporations (MNCs) : a large corporation that produces and sells its goods and services throughout the world.

Cooperative: business organization owned and operated by a group of individuals for their shared benefit. ex: an apartment complex., health care service, agricultural co-op

What do you look for in a job?

• 1. working conditions

• 2. wage

• 3. intrinsic rewards

• 4. location

• 5. skills

• 6. market trends