Level of merger activity and takeovers

Mergers, merger waves, and the factors that drive these mergers have caused paradigm shifts in the corporate landscape of the United States. Several factors drive these merger waves.

1. Identify which of the following has been a driving factor for mergers:

a. Shareholders forced companies to merge to gain stronger control over their management.

b. Companies looked at mergers as a strategic move to gain economies of scale or scope.

2. If managers of the target company resist the merger because they feel the price is too low or for other reasons, the acquiring firms offer is said to be a ___________ . (Hostile merger / Friendly merger / Horizontal merger)

3. After the hostile raids of the mid-1960s, Congress passed the Williams Act in 1968. Which of the following is true about the Williams Act?

a. The law had an objective of making the disclosure terms more lenient for acquiring firms.

b. The law had an objective of regulating the way that acquiring firms can structure offers.