Acquisitions can be very fruitful if both the acquirer (the company to purchase) and target (the company to be sold) are well managed and the way in which the two companies will be combined is well-planned to ensure that synergy is achieved.

Companies merge all the time, but not all of them manage a successful integration. Here we look at the latest corporate pairings.

Tutorial: The Basics Of Mergers and Acquisitions

Google Acquires Admob
In a $750 million deal that just closed, Google (Nasdaq:GOOG), the leader in advertising, plans to acquire the fairly new yet successful mobile advertisement company, Admob, after getting clearance from the Federal Trade Commission (FTC).

The FTC recently granted the clearance for Google to proceed with its acquisition, and dismissed potential illegal competition fears, after investigating for potential antitrust issues. Apple (Nasdaq:AAPL) recently acquired Admob's competition, Quattro Wireless. Thus, the FTC found that the Admob acquisition would not harm competition in the emerging market for mobile advertising. (To find out more about antitrust, read Antitrust Defined.)

Admob has recently found success placing simplified ads on the iPhone.

Yahoo! Takes Over Associated Content
Yahoo (Nasdaq:YHOO) news sector may have a new strategy for building its growing dominance in news and advertising, hoping to take away market share from its competitors and target a wider range of audiences. In May, Yahoo!, based out in Sunnyvale, Calif., has sealed the deal to buy out Associated Content. According to Yahoo!, it purchased Associated Content to increase the amount of information on its site, which it hopes will benefit the site's estimated 600 million users.

Associated Content was founded in 2005 and is headquartered in New York and Denver. Its business strategy involves user-generated content and the site, according to ComScore Inc., gets roughly 16 million unique visitors per month. Freelance writers submit around 50,000 unique pieces of media per month and are compensated for their work based on page views.

Yahoo's purchase of such an established company should generate more revenue. Although it is hard to speculate about either corporation's agenda, the acquisition has certainly put Associated Content's unique business model on the map.

Fairfax Acquires Zenith National
Fairfax Financial Holdings Limited (OTC:FRFHF), a Canadian insurance company, is engaged in property and casualty insurance and reinsurance and investment management through its subsidiaries. Zenith National Insurance Corporation is a holding company focused on workers' compensation headquartered in Woodland Hills, CA.

In late May, Fairfax acquired Zenith's outstanding common stock for $38 per share. This acquisition reflects the company's strategy of investing in well-positioned companies.

Just a Rumor: Best Buy and RadioShack Merger?
Former competitors Best Buy (NYSE:BBY) and RadioShack (NYSE:RSH) are rumored to be joining forces for a $3 billion merger. RadioShack, which was founded in 1921, met its match with Best Buy. But after the initial rumors surfaced in the New York Post, conversation has been left to a minimum as of late.

The move to bring the two companies may be an attempt to stake out some territory in the handheld devices industry, and meet growing demand for these wireless gadgets.

Why M&As Matter
Mergers can allow companies to combine forces and stake out a greater portion of market share. But they often fall through at the last minute - and even when companies do merge, the outcome isn't always a success. Keep an eye on these newly merged companies; it's likely that only a few will achieve the successful corporate pairing they are hoping for.

Catch up on the latest financial news in Water Cooler Finance: Crying Over Spilled Oil, And Buffett Goes To Court.

Related Articles
  1. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  2. Active Trading

    Market Efficiency Basics

    Market efficiency theory states that a stock’s price will fully reflect all available and relevant information at any given time.
  3. Fundamental Analysis

    5 Basic Financial Ratios And What They Reveal

    Understanding financial ratios can help investors pick strong stocks and build wealth. Here are five to know.
  4. Investing

    What Investors Need to Know About Returns in 2016

    Last year wasn’t a great one for investors seeking solid returns, so here are three things we believe all investors need to know about returns in 2016.
  5. Economics

    The Basics Of Business Forecasting

    Whether business forecasts pertain to finances, growth, or raw materials, it’s important to remember that a forecast is little more than an informed guess.
  6. Economics

    Forces Behind Interest Rates

    Interest is a cost for one party, and income for another. Regardless of the perspective, interest rates are always changing.
  7. Stock Analysis

    Dow Chemical: An Activist Investment Analysis (DOW)

    Read about how an activist hedge fund demanded changes at Dow Chemical. Learn about deal structure of the proposed merger between Dow and DuPont.
  8. Investing

    New Year, New Investing Strategy: Exploring ETFs

    Whether you’re a seasoned investor or new to the markets, you need to learn as much as you can about the present environment and how to navigate it.
  9. Term

    What's a Vertical Merger?

    A vertical merger occurs when two companies that produce goods or services for the same finished product merge operations.
  10. Term

    How Statistical Significance is Determined

    If something is statistically significant, it’s unlikely that it happened by chance.
  1. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  2. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  3. What is the difference between positive and normative economics?

    Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic ... Read Full Answer >>
  4. Do penny stocks trade after hours?

    Penny stocks are common shares of public companies that trade at a low price per share. These companies are normally small, ... Read Full Answer >>
  5. Does consumer protection cover my debts?

    The most impactful consumer protection laws and regulations in the United States are overseen by the Federal Trade Commission ... Read Full Answer >>
  6. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center