T-com is an industrial conglomerate that work in numerous sectors, including, steel products and trading to mechanical and electrical engineering, automotive and telecommunications. In 2018, it has acquired Beta Co., multinational a telecommunication company. The acquisition costed $971 Million and it was made for cash. It has resulted in $270 Million cost reduction per year. Assume that the values of both T-com and Beta Co. before acquisition were $12.5 Billion and $5.3 Billion respectively and that the opportunity cost of capital is 12%.

1- WHAT IS THE TYPE OF THIS COMBINATION ?

2- WHAT IS THE GAIN FROM THIS ACQUISITION ?

3- HOW MUCH CASH MONEY WAS PAID BY T-COM TO BETA CO. ?

4- IF T-COM HAD PAID $50 IN CASH FOR EVERY SHARE TO BETA CO. HOW MANY SHARES HAD BETA CO. BEFORE THE ACQUISITION ?

5- WHAT IS THE NET PRESENT VALUE ( NPV ) OF THIS ACQUISITION ?