You are the CFO of your organization where you will be deciding between three choices of consolidation. This assignment will ask you to select a choice that best supports short and long-term goals of common stock of a company compared to two choices with minority interests. All three choices represent control and significant influence over the subsidiary. In the below scenario, you are tasked with integrating the merger between two companies. You will select two companies from the same industry on the NASDAQ stock exchange. One will be the parent company while the other will be the subsidiary.
You have three choices, any of which you believe that the board of directors will support:
- Choice 1: Your company acquires 80% percent of the common stock of the target company with a minority interest of 20%.
- Choice 2: Your company acquires 70% percent of the common stock of the target company with a minority interest of 30%.
- Choice 3: Your company acquires 100% percent of the common stock of the target company.
Write a 4–5 page paper in which you:
- Assume the role of the CFO who has been tasked with integrating the merger between the two companies. Introduce these two NASDAQ companies, explaining pertinent background information.
- Explain the manner in which the acquisition fits into your company’s operational and strategic directions.
- Select two choices provided in the scenario and compare the key accounting requirements for each of the selected choices.
- One of the selected choices will be presented to the CEO and Board of Directors. The BOD will ask which method will provide substantial company growth in the next three years. Explain why your choice is the best forward-facing company goals for the company.
- Identify and explain at least three possible strengths, business threats, and ways to mitigate those threats as a result of the proposed acquisition choice made.
- Use at least two quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.
- Produce writing that is clear, well-organized, and applies appropriate SWS style. Writing contains accurate grammar, mechanics, and spelling.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The following specific course learning outcomes associated with this assignment:
- Justify an acquisition strategy that best fits the needs of an organization.