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Debt during takeover

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Debt during takeover

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • December 3, 2021 at 9:30 am #642377
    akshayv73
    Participant
    • Topics: 7
    • Replies: 15
    • ☆

    Respected sir, If debt is taken over by acquirer during acquisition it would just add to MV of debt of combined company and wont affect synergy gains right? but if that debt is paid off by acquirer company during an acquisition will that impact synergy gains for acquirer shareholders?

    December 3, 2021 at 3:01 pm #642405
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    No. Synergy gains only occur because the combined company make more profit than the two companies separately and because the combined company becomes less risky.

    December 3, 2021 at 4:45 pm #642421
    akshayv73
    Participant
    • Topics: 7
    • Replies: 15
    • ☆

    Thanks sir

    December 4, 2021 at 9:10 am #642464
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54696
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Debt during takeover’ is closed to new replies.

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