Group 2 - Megamergers.pptx - MEGAMERGERS By Group 2...

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InternalMEGAMERGERSBy Group 2:Brittany AndersonJohn CatanzaritaChristopher HernandezJulie Romans
InternalMEGAMERGERS DEFINEDWhat is a megamerger?"..the joining of two large corporations, typically involving a transaction worth billions of dollars in value." How do they happen?"…through acquisition, merger, consolidation, or combination of two existing corporations." End Result"A megamerger creates one corporation that may maintain control over a large percentage of market share within its industry."(Kenton, 2018)
InternalBENEFITS OF MEGAMERGERSNetwork EconomiesIncreased output leads to lower average costs (economies of scale)Bulk BuyingBenefiting from brand name (marketing economies)Large machines and investments are spread over larger output (technical economies)Cuts out duplicationResearch and DevelopmentEnsures companies are more profitable and have more funds to spend on research and development.Can afford more “Failures”Regulation of MonopolyEven if a firm gains monopoly power from a merger, it doesn’t lead to higher prices if it is sufficiently regulated by the government.

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