Financial management;Mergers and Acquisition Assignment

Financial managementMergers and Acquisition - Assignment ExampleThe major reason for citizenship change was to reduce the tax base as it trim to 26% when both companies combined. Canada usually has a lower tax rate compared to the United States. This move was marred with contr oversy as many claimed that was tax eversion and it even attracted the attention of president Obama as it was viewed the countrys economy would suffer. Over and above there was no illegality in the relocation hence the telephoner would enjoy lower tax rates ultimately improved the familiaritys profitability (Shabi, 2012). One of the synergy to be enjoyed by burger king includes tax synergy. One of the revenue synergy to gain from would be an increase in its market share as by acquiring TimHorton the ships company also acquired its customers. The company would easy penetrate the Canadian market as TimHorton controlled a large stake of the Canadian market. The acquisition would solving to a combined 18000 restaurants in over 100 countries with total sales amounting to $ 23 billion. Based on burger king would be listed on both the New York acquit exchange and Canadian stock exchange. Burger king would also enjoy distribution channels used by TimHorton. Companies buy companies to reach new markets and grow revenues and earnings. A merge may diffuse two companies marketing and distribution, giving them new sales opportunities. A merger can also improve a companys standing in the investment society bigger firms often have an easier time raising capital than smaller ones.Burger king would enjoy cost reduction synergies, which include increased economies of scale. The bigger the company the better the purchasing power as size matters. The increase of size would lead to increase in goods sourced from suppliers. Greater quantities would result to increase in discounts takeered. This would result in cost reduction and hence increase the organisation productivity. Due to acquisition, there would be reduction of staff, as some would have to lay off to cut