Topic: The Birdie Golf-Hybrid Golf Merger

Paper details: Mini-Case Study: The Birdie Golf-Hybrid Golf Merger

This case study highlights the decisions that senior managers and boards of directors face when deciding whether to merge with another firm. In addition to projecting future organizational performance of their current firm, the board of directors and senior management must analyze the other firm’s financial data and consider the possible outcomes of joining the two organizations and the impact the merger may have on their own finances and future.

After reading the scenario:

Briefly answer the four questions at the end (2 or 3 sentences each).
Include all calculations you were asked to provide.

Mergers and corporate restructuring play a big role in corporate finance environment. A merger will take place when two companies join together to operate as one firm. Through this, the new firm will have an increased market share thus reducing the competition. Any reduction in market competition can be perceived as a disadvantage to the public interest but it will boost the company’s profits. The merged firm can be able to enjoy the economies of scale. This will only take place when a larger company with increased output can reduce average costs. It is important to note that lower average costs enable lower prices for consumers. In the Case study “The Birdie Golf-Hybrid Golf Merger”, the companies have been in talks for six months to merge. Both companies believe that they can benefit from the economies of scale in manufacturing and marketing. This paper will examine the need for these two firms to merge while at the same time examining the financial factors such as price per share, exchange ratio, and the merger price that will influence the merging of these two firms.