Downsizing may be necessary because acquisitions often create a situation in which the newly formed firm has duplicate organizational functions such as sales, manufacturing, distribution, and human resources management

Synergy is created by the efficiencies derived from economies of scale and economies of scope and by sharing resources across the businesses in the newly created firm’s portfolio

Most acquisitions that are designed to achieve greater market power entail buying a competitor, a supplier, a distributor, or a business in a highly related industry

Company experiences show that participation in and overseeing the activities required for making acquisitions can divert managerial attention from other matters that are necessary for long-term competitive success

Unrelated diversified firms become overdiversified with a smaller number of business units than do firms using a related diversification strategy

Skaredykat Inc. is considering initial expansion beyond its home market. The firm has decided not to enter markets that differ greatly from its home market, instead expanding within the twelve-nation region that includes its home country.  Which of the following statements is true?

A firm is considering the pursuit of international opportunities. In considering the pros and cons, the analyst likely pointed out that the firm would gain access to labor, resources, and customers, all of which are benefits related to economies of scale, through international strategies

Junk bonds are now used more frequently to finance acquisitions primarily because of the belief that debt disciplines managers

When a firm becomes highly diversified through acquisitions, managers often focus on financial controls rather than strategic controls

The __________ phase is probably the single most important determinant of shareholder value creation in mergers and acquisitions.