Question

Research a hostile takeover of an “acquired firm” in the recent five years, and examine the long-term impact on the stock market performance of the “acquiring firm” in the post-acquisition era. Why was the takeover beneficial or harmful for the previous shareholders of the “acquired firm”? How about the previous shareholders of the “acquiring firm”?

Answer 1

One of the most hostile takeovers was the deal between Dell International company and EMC corporations in 2015. Dell bought the shares of EMC worth 67 billion dollars with an inflation adjustment rate of 69 billion dollars. from the takeover, Dell Corporations acquired over 51 % of the EMC and hence making EMC to be owned by Dell.

long term market impact

1. dell became the greatest beneficiaries since the takeover helped them to reduce competition.
2. increased customer base which has led to wider market for the Dell products.

benefits for the previous shareholders

1. increased customer base hence more profit margins for members.
2. reduced competition hence reducing the unnecessary losses.

Explanation:

the shareholders of the EMC did benefit from the takeover as this also increased the profit margins of their company. however, they had no authority over the daily operations of the company as it was now fully managed by Dell management. this brought a lot of discomfort to the shareholders and hence making most of them to sell their shares on throwaway prices