Company Airy merges Company Windy, which runs in the same hospitality industry. The management of Airy is
Question:
Company Airy merges Company Windy, which runs in the same hospitality industry. The management of Airy is well known for its free breakfast and room tidbits. This policy is believed can boost revenue. After the M&A Company Windy was interested in this policy and adopt this policy. Meanwhile, after the M&A, they agree to choose Mr. Polkie as the in charge of the integration process. The new form of company has so many inefficient and non-productive assets, which need to be sold off. Mr. Polkie has to do divestiture for those assets. He has to set all those processes.
[I] According to the case study above, what is the type of Post-Merger Integration? Explain briefly
[II] According to the case study above, what is the approach to Post-Merger Integration? Explain briefly
[III] The stock price of the new form company has surged since its merger activities. It has increased by 40% implying a synergy of M&A. If the new form of Corporation aims to increase its capital expenditure via equity, explain why the “right issue” is one of the best strategies.
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby