4.2.4 Reasons for global mergers or joint ventures

Question 1

What are mergers?

Answer 1

Two businesses form as one» agreed

Question 2

What is a joint venture?

Answer 2

Two businesses working together but remain seperate

Question 3

What is a takeover?

Answer 3

•A business buys the other firm.
•Must be over 50% of the shares.
•Can be hostile or agreed

Question 4

What are five reason for global mergers and joint ventures?

Answer 4

1)Spread risk
2)Enter new markets
3)Acquiring international brand names
4)Secure resources + supplys
5)Maintaining or increasing global competitiveness

Question 5

Name three benefits of a Joint venture.

Answer 5

1)Expertise and resources
2)Reduce risk
3)Mutual benefits

Question 6

Name three disadvantages of a joint venture.

Answer 6

1)Different vision
2)Consumer may become confused
3)Shared profits
4)Damaged reputation