Mergers

A merger is an agreement that unites two existing companies into one new company. There are
several types of mergers and also several reasons why companies complete mergers. Mergers and
acquisitions are commonly done to expand a company’s reach, expand into new segments, or gain
market share. All of these are done to increase shareholder value.

1. Vodafone and Mannesmann

This merger, which took place in 2000, was worth over $180 billion and is the largest merger and
acquisition deal in history. In it, U.K.-based Vodafone acquired German company Mannesmann.
As a result, Vodafone became the largest mobile operator in the world while setting the stage for
future deals in the telecom industry. Many Germans were against this deal because they wanted
German businesses to remain key players in the global marketplace.

The deal was significant because it signaled the telecom boom as mobile phones began increasing
in popularity. However, it was not ultimately successful. “After Mannesmann rejected Vodafone’s
first offer, Vodafone had to nearly double its offer…Unfortunately, the combination didn’t work
out the way Vodafone hoped, and as a result, it had to write off tens of billions of dollars in the
following years because of it,”

2. America Online and Time Warner

This merger is the second largest in history, and it took place during the same year as the
Mannesmann acquisition. In 2000, America Online (more widely known as AOL) acquired Time
Warner for $164 billion. At the time, most Americans used their landline phone service to access
the internet through provider AOL, making the company one of the biggest technology
organizations in America. Though expensive, this deal lasted only nine years. In 2009, Time
Warner became an independent company as AOL continued to lose value in the post-dial-up age.

3. Pfizer and Warner-Lambert

Also in 2000, pharmaceutical company Pfizer acquired Warner-Lambert for $90 billion. This
merger is considered by some experts to be “one of the most hostile in history” because Warner-
Lambert was originally to be purchased by consumer goods company American Home Products.
However, American Home Products “walked away from the deal with $1.8 billion worth of break-
up fees, one of the largest ever payouts for a failed deal,” according to Yahoo Finance.

When Pfizer acquired Warner-Lambert, the result was the second largest drug company in the
world. The main reason for the acquisition was ownership of top-selling cholesterol medication
Lipitor: “Pfizer had commercial rights to Lipitor, but Pfizer was splitting profits on it with Warner-
Lambert, and in 1999, Warner-Lambert sued Pfizer to end their licensing pact,” Business Insider
explains. By acquiring Warner-Lambert, Pfizer removed any risk associated with the lawsuit and
gained sole control of Lipitor’s skyrocketing profits, which grew to more than $13 billion annually.

4. AT&T and BellSouth

In 2006, AT&T announced its plans to acquire BellSouth. This deal would ultimately cement
AT&T’s place as a major player in the wireless industry. In purchasing BellSouth for $86 billion,
AT&T was able to expand coverage into rural areas of the United States, giving AT&T an
advantage as the mobile phone market expanded. “The firm used its new position to create bundled
services that included mobile services along with television and internet connections in an effort
to gain new subscribers and dissuade customers from switching to new providers,” Yahoo Finance
explains.

5. Exxon and Mobil

This merger took place in 1999 and created a “superpower” in the energy industry. Oil prices were
consistently low, and energy companies were taking a hit as a result. This led Exxon and Mobil to
merge in a deal that Yahoo Finance calls “one of the most successful in M&A history.” The U.S.
government approved the deal after assurances that the two merging companies would sell over
2,400 gas stations across the country. “Exxon defended the deal, the largest in a string of
consolidation moves in the industry, citing price pressure on crude oil, the need for greater
efficiency and new competitive threats overseas,”
Acquisitions

An acquisition is when one company purchases most or all of another company's shares to gain
control of that company. Purchasing more than 50% of a target firm's stock and other assets allows
the acquirer to make decisions about the newly acquired assets without the approval of the
company’s shareholders. Acquisitions, which are very common in business, may occur with the
target company's approval, or in spite of its disapproval.

1. Amazon Buys Whole Foods

Earlier this summer, e-commerce giant Amazon AMZN announced that it would be buying high-
end organic grocery chain Whole Foods for $13.7 billion; the deal officially closed at the end of
August. While the acquisition has been off to a rocky start, it gives Amazon hundreds of physical
stores and provides the company a strong entryway into the competitive grocery and food industry.

2. Intel Acquires Mobileye

Intel INTC said in August that it had completed its tender offer for the outstanding shares of
Mobileye, a company that develops sensors and cameras for Advanced Driver Assisted Systems
(ADAS); the Israel-based company is also known for its computer vision and machine learning
technology. The $15.3 billion deal gives Intel a huge advantage in the growing self-driving car
industry, a market they estimate will grow to $70 billion annually by 2030.

3. JAB Holdings Acquires Panera

For $7.5 billion, European investment firm JAB reached a deal to buy bakery-café chain Panera
Bread earlier this year, creating a formidable food-focused portfolio that includes Keurig Green
Mountain, Krispy Kreme Doughnuts, Peet's Coffee & Tea, and Caribou Coffee Company.
Additionally, Panera is a restaurant that has managed to post steady comparable sales growth and
rising revenue at a time when many chains are hurting.
 4. Michael Kors Acquires Jimmy Choo

"Affordable" luxury retailer Michael Kors KORS agreed to buy footwear brand Jimmy Choo, a
popular name in the fashion world known for its towering stilettos, for about $1.2 billion in July.
The purchase had been a long-rumored one, and Kors plans on using its own massive global
infrastructure to expand Jimmy Choo's footprint. This likely won't be Kors' last acquisition either,
as the company is now focused on forming a new, "luxury group."

5. Cisco Acquires BroadSoft

In a move that will grow its software footprint, Cisco CSCO paid nearly $2 billion for BroadSoft
BSFT, a company that sells cloud-based call control software, a product that is often re-labeled
and sold by traditional telephone companies to their customers. This acquisition is what IT vendors
dub "the future of work," as it uses technology meant to make it easier for workgroups to
communicate with each other.

Takeover

Takeover is the acquisition of one company (called the target company) by another (called the
acquirer) that is accomplished by going directly to the company's shareholders or fighting to
replace management to get the acquisition approved. A hostile takeover can be accomplished
through either a tender offer or a proxy fight.

1. AOL and Time Warner, $164bn, 2000

When AOL announced it was taking over the much larger and successful Time Warner, it was
hailed the deal of the millennium. But the dotcom boom meant the new AOL Time Warner lost
over $200bn in value in less than two years.

2. Sanofi-Aventis and Genzyme Corp, $24.5bn, 2010

Sanofi fought hard to takeover biotechnology company Genzyme in 2010. It had to offer
significantly more per share than they initially wanted before triggering a top-up option to assume
control over around 90 percent of its target company.
 3. Icahn Enterprises and Clorox, $11.7bn, 2011

When Clorox refused Icahn’s bid of $10bn, CEO Carl Icahn sent a full-caps letter to the Clorox
board directly telling them shareholders should decide on the takeover. Though the bid was
eventually raised to $11.7bn, Icahn was eventually forced to withdraw and drop the push for a
proxy fight.

4. Air Products & Chemicals and Airgas, $7.94bn, 2010

Airgas was forced to take Air Products to court in Delaware to avoid the hostile takeover, after the
buyer attempted to seal the deal over the course of a year. The main point of contention was the
price per share Air Products was offering, and eventually a judge sided with the short-changed
seller.

Spinoff

A spinoff is the creation of an independent company through the sale or distribution of new shares
of an existing business or division of a parent company. A spinoff is a type of divestiture. The
spun-off companies are expected to be worth more as independent entities than as parts of a larger
business. A spinoff is also known as a spin out or starbust.

1. Bioverativ Inc.

Bioverativ spun off of Biogen on Feb. 22, 2017, becoming an independent biopharmaceutical
company focused on hemophilia, cold agglutinin, among other uncommon blood disorders.

Bioverativ has two therapies: Eloctate, for the treatment of hemophilia A, and Alprolix, for use in
hemophilia B. Seven more wait in its pipeline at various stages of progress.

The company already found a buyer in global biopharmaceutical company Sanofi. On Jan. 22, the
two companies announced Sanofi would buy Bioverative for $105 per share in cash, or a total of
$11.6 billion.
 2. Weibo Corp.

Parent company SINA Corp. announced a reduction in ownership of Weibo Corp. on June 8, and
investors have watched the stock skyrocket since.

Weibo, the largest social media platform in China, resembles the U.S.’s Twitter and has a $30.32
billion market cap on its own. In the deal, SINA distributed to investors 10 shares of Weibo for
every one share of SINA they held, decreasing SINA’s equity stake in Weibo to 46% from 49%
but retaining an ownership stake. Weibo officially spun off Sina in 2014, making it an official
subsidiary.

Weibo generated net revenues of $1.15 billion in 2017, reflecting growth of 75% from the previous
year. The company benefited from $996.7 million in advertising and market revenues, which
escalated 75%, and value-added services of $153.3 million, which leaped 81%.

About 79 million more monthly users participated on Weibo in the fourth quarter, bringing its total
to 392 million.

"We are pleased to announce that we have achieved an important milestone as our total revenues
for full-year 2017 surpassed $1 billion. Revenues from SMEs, key accounts and non-advertising
all saw robust growth, while our profit and user base reached new highs." said Gaofei Wang, CEO
of Weibo.

3. Hilton Grand Vacations

The separation of Hilton Grand Vacations from its parent Hilton Worldwide Holdings took place
on Jan. 4, with the young company focusing on timeshare and resort management.

"Hilton Grand Vacations is a premier operator and rapidly growing company in the timeshare
industry," said Mark Wang, president & CEO, Hilton Grand Vacations. "We are focused on adding
value for our members, continued net owner growth, and delivering a strong return on our capital
efficient business."

In 2017, Hilton Grand Vacations saw revenue growth across its three segments: Real estate sales
and financing; resort operations and club management; and contract sales. Net income soared year-
over-year to $327 million, or $3.28 per diluted share, from $168 million, or $1.70 per diluted share,
though 2017 included a deferred tax benefit of around $132 million.

The company appears set for continued growth with the addition of its first resort in Japan. The
development will be a 132-unit timeshare report with roughly 300 rooms, located on Sesokojima
Island, Okinawa and set to open in 2020.

4. DXC Technology Co.

DXC Technology came into existence through the merger of CSC and the enterprise services
business of Hewlett Packard Enterprise, creating an IT services company with 6,000 clients across
70 countries. The deal reached completion on April 1.

“With the successful close of our transaction, we are standing up a company that is ideally suited
to meeting the needs of a rapidly changing technology marketplace,” Mike Lawrie, DXC
Technology chairman, president and chief executive officer said in a statement.

For the period ended Feb. 8, DXC Technology delivered $779 million in net income, including a
$341 benefit from tax law changes, compared to $37 million in the same period of 2016. Diluted
earnings per share totaled $2.72 compared to 22 cents.

DXC Technology is also engaging in further deals. In October, it announced it would combine its
U.S. public sector business with Vencore Holding Corp. and KeyPoint Government Solutions,
forming a public company that specifically for government clients. The combined company will
have around $4.3 billion in revenues and offer cybersecurity, cloud engineering and other
technology services.

5. Varex Imaging Corp.

Varex Imaging completed its spin-off from Varian Medical Systems on Jan. 30, 2017, with the
parent company giving investors 0.4 of a share of Varex stock for each share they owned.
The newly created company, Varex, deals in x-ray and imaging components like tubes and digital
flat panel detectors used in x-ray systems. Its products are used in medical as well as industrial and
security industries.

Varex Imaging has a $1.8 billion market cap. For its first quarter of fiscal year 2018, Varex
announced a 12% increase in revenues, to $176 million, missing the company’s expectations.

"Revenues grew for the first quarter, but were short of our projections. The acquired imaging
business performed well and revenues from that business exceeded our expectations. At the same
we had a decline in sales from several digital detector customers as they managed inventory levels
to better match timing of their shipments to later in the year, which also led to a lower operating
margin rate. With more than 85% of our anticipated revenues for the year identified by current
customer-provided orders and forecasts, we remain confident in our expectation for full year
revenues to grow 13% to 14% over the prior year," Sunny Sanyal, CEO of Varex Imaging Corp.,
said in a statement.

Its net earnings were virtually flat, at $11 million in the first quarter, or 30 cents per diluted share,
compared to $11 million, or 29 per diluted share in the prior-year quarter.

Room for growth may exist in its benefits from the corporate tax law rate, which dwindled to 24-
25% for full fiscal year 2018. The company plans to use the extra cash to grow investments in
technology, capital improvements and its employees.

The company is expecting revenue growth of 13-14% for the full fiscal year, with adjusted net
earnings of $1.82 to $1.92.

Stock Split

A stock split is a corporate action in which a company divides its existing shares into multiple
shares to boost the liquidity of the shares. Although the number of shares outstanding increases by
a specific multiple, the total dollar value of the shares remains the same compared to pre-split
amounts, because the split does not add any real value. The most common split ratios are 2-for-1
or 3-for-1, which means that the stockholder will have two or three shares, respectively, for every
share held earlier.
 1. Horizon Bancorp, Inc. Announces Three-for-Two Stock Split
2. Jewett-Cameron Announces 2 for 1 Stock Split
3. Cameo Resources Corp. Effects 3-for-1 Forward Stock Split and Changes Name
to Cameo Cobalt Corp.

Dividends

A dividend is the distribution of reward from a portion of company's earnings and is paid to a class
of its shareholders. Dividends are decided and managed by the company’s board of directors,
though they must be approved by the shareholders through their voting rights. Dividends can be
issued as cash payments, as shares of stock, or other property, though cash dividends are the most
common. Along with companies, various mutual funds and exchange traded funds (ETF) also pay
dividends.

Some of the recently dividend declared companies in India are:

1. Grauer and Weil

2. Dabur India
3. Keynote Finance
4. Dr Lal PathLab
5. Godrej Ind
6. JSW Energy
7. Bombay Burmah
8. Britannia
9. Emami Paper
10. MRF