Adidax, a multinational sports shoe manufacturer, has announced its plan to acquire Reebox, trading in the same sector, at an estimated value of $ 3.0 billion. Adidax offered to pay over a 24% premium over the last closing price for Reebox. This was a mouth-watering deal for Reebox, as it was also facing tough competition from Nikex, Asix, and Pumax, all manufacturing sports shoes.

The sports shoe market in America is mainly dominated by Nikex with a 38% share. Increased market share and cost-cutting through synergies were clear-cut strategies for both Adidax and Reebox. Adidax with its quality products and Reebox with its appreciated models planned to capture the scene.

You are required to discuss the implications of the above acquisition, with regard to :

(a) the main sources of value generated in the acquisition of Reebox by Adidax. (12 marks)

(b) the different ways Adidax can acquire Reebox. (8 marks)

(c) any defensive strategy Reebox can put in place do to resist a takeover by Adidax. (5 marks)