1. Rationale for mergers Aa Aa Academics and practitioners have identified several major reasons that drive firms' merger, acquisition, and breakup decisions. Correctly identify the term or motive for the merger and acquisition with its description. Description Term or Motive for Merger An acquirer buys a firm, liquidates it, and turns a handsome profit because the value of the firm's individual parts (if sold off separately) is greater than its current market value. A firm acquires a foreign subsidiary in an effort to stabilize earnings. During the 1980s, Hallmark acquired Binney& Smith (manufacturers of Crayola Crayons and Magic Markers) and Univision (a Spanish-language TV network) to expand its line of products in different segments and protect against the seasonal nature of its core greeting card business. A merger is driven by the managers' desire to increase the size of the firm rather than by strict economic analysis Tax considerations Managers' personal incentives Diversification Synergy