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Essay Available:
Pages:
4 pages/β‰ˆ1100 words
Sources:
2 Sources
Style:
Other
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 18.72
Topic:

Business Acquisition: A Merger Between Apple Inc and Beats Electronics LLC

Essay Instructions:

Overview
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.
Scenario
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.
Instructions
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.

Essay Sample Content Preview:

Business Acquisitions
Student's Name
Institution Affiliation
Instructor
Date
Introduction
It is common for businesses to employ acquisition to redirect and reshape their corporate strategy. Organizations acquire companies because it might be much easier and less risky than pursuing the endeavor internally. However, that is not always the case, as some firms do not benefit from the prospect. Therefore, the parent organization's financial officer needs to carry out an analysis to determine the viability of merging. This work explores the merger between a parent company, Apple Inc, and the subsidiary, Beats Electronics LLC. The paper further presents the most desirable choice after making a comparison with other options.
Company Descriptions
Apple Inc.
Apple Inc was established in 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak. The organization's first product was Apple I, a personal computer that enabled users to make their computers (BS, 2022). The company became a public entity in 1980, with its first CEO, Steve Jobs, in 1983. Apple Inc's other successful product after apple I was Macintosh personal computer introduced in 1984. The item was a thriving asset for the company, making it one of the leading computer manufacturing companies globally.
In the 1990s, the entity launched various products, including the PowerBook, the iPod, and the iMac. It also made a significant milestone by introducing the first iPod digital music player in 2001. In 2003 and 2007, Apple Inc launched the iTunes store and iPhone. Last but not least, the company introduced iPod and Apple Watch in 2010 and 2014, respectively.
Beats Electronics LLC
Beats Electronics LLC was established in 2006 by Dr. Dre and Jimmy Iovine. The organization's first creation was the beats by Dr. Dre line of headphones introduced in 2008 (Zoom info, 2022). The company has increased its product line, including speakers, earphones, and other audio products.
Matching of the Strategy
The Acquisition of Beats Electronic LLC matches Apple Inc's operational and strategic directions. For instance, the acquisition provides the latter with a strong presence and influence in the headphone market. Thus, it is a significant part of Apple Inc's strategy to be a leading digital music and services supplier. In addition, the acquisition offers the company a new product line that compliments the existing items it already provides in its current market (Moskovicz, 2018). Moreover, Apple Inc's buying of Beats Electronics LLC gives it access to the latter's technology and engineering proficiency. The parent company will gain a competitive advantage by developing and adding valuable products and services to its line of operation in the future. The acquisition builds Apple Inc's brand image in the music industry. Thus, the company will increase its visibility and reputation in its area of operation.
Comparison of the Two Selected Choices
Regarding the two selected choices, if Apple Inc acquires 80% of the common stock of Beats Electronics LLC with a minority of 20%, the former would have to consolidate the financial statements of the two entities. Thus, Apple Inc will have to include liabilities, assets, and equity of Beats Electronics LLC on its balance sh...
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