Wednesday, January 26, 2011

Financial Transaction and Strategic Transaction

  • Strategic transaction
    • A target firm is acquired based in part on the synergies it brings to the acquirer.
  • Financial transaction
    • It occurs when there are no synergies.
    • A acquiring firm does not own a company in the same industry with the target's; so acquiring firm cannot merge the target company with another company, i.e. no synergies.

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