M&A ch2

The primary purpose of the 1968 Williams Act was to Protect target firm employees from layoffs Prosecute target firm shareholders who misuse information Prevent tender offers Promote tender offers Give target firm shareholders time to review takeover proposals

Give target firm shareholders time to review takeover proposals

U.S. antitrust regulators are most concerned about what types of transaction? Minority investments Horizontal mergers Joint ventures Alliances Vertical mergers

Horizontal mergers

European antitrust policies differ from those in the U.S. in what important way? They focus on the impact on competitors They focus on the impact on consumers They focus on both consumers and competitors They focus on suppliers They focus on consumers, suppliers, and competitors

They focus on the impact on competitors

All of the following are true about a consent decree except FTC studies indicate that consent decrees have historically been largely ineffectual in promoting competition. An acquirer may seek to negotiate a consent decree in advance of consummating a deal. Consent decrees tend to be most effective in promoting competition if the divestitures made by the acquiring firms are to competitors. Consent decrees require the merging parties to divest overlapping businesses. In the absent of a consent decree, a buyer usually makes the receipt of regulatory approval necessary to closing the deal.

FTC studies indicate that consent decrees have historically been largely ineffectual in promoting competition.

The Securities Act of 1933 requires the registration of all securities issued to the public. Such registration requires which of the following disclosures. Select all that apply. Information about management Description of the firm's properties and business Description of the securities Trading in the company's shares by insiders Financial statements audited by public accountants

Information about management Description of the firm's properties and business Description of the securities Financial statements audited by public accountants

All of the following are true of the Williams Act except that It facilitates rapid takeovers of target companies It requires investors acquiring 5% or more of a public company to file a 13(d) with the SEC Firms undertaking tender offers are required to file a 14(d)-1 with the SEC Acquiring firms initiating tender offers must disclose their intentions and business plans It consists of a series of amendments to the 1934 Securities Exchange Act

It facilitates rapid takeovers of target companies

Which of the following are used by antitrust regulators to determine whether a proposed transaction will be anti-competitive? Select all that apply. Market share of the combining firms Ownership structure of the merging firms Public opinion on the merger Number of substitute products Barriers to entry

Market share of the combining firms Number of substitute products Barriers to entry

All of the following are true of the Hart-Scott-Rodino Antitrust Improvements Act except The FTC/DoJ may file a lawsuit to block a proposed transaction The acquiring or target firm may agree to divest certain businesses in order to get regulatory approval. The Act is intended to give regulators time to determine whether the proposed combination is anti-competitive. Only the acquiring firm is required to file with the FTC/DoJ Acquisitions involving firms of a certain size cannot be completed until certain information is supplied to the FTC/DoJ

Only the acquiring firm is required to file with the FTC/DoJ

In determining whether a proposed transaction is anti-competitive, U.S. regulators look at all of the following except The potential for the target firm to fail without the takeover Market share of the combined businesses Potential for price fixing Ease of new competitors to enter the market Potential for job loss among target firm's employees

Potential for job loss among target firm's employees

Which of the following are true about the Sherman Antitrust Act? Select all that apply. Prohibits business combinations that result in monopolies. Prohibits interlocking directorates Prohibits tying of contracts Prohibits business combinations resulting in a significant increase in the pricing power of a single firm. Makes illegal all contracts unreasonably restraining trade.

Prohibits business combinations that result in monopolies. Prohibits business combinations resulting in a significant increase in the pricing power of a single firm. Makes illegal all contracts unreasonably restraining trade.

State "blue sky" laws are designed to Protect individual investors from investing in fraudulent securities' offerings Restrict foreign investment in individual states Prevent premature announcement of M&As Allow states to block M&As deemed as anticompetitive Protect workers' pensions

Protect individual investors from investing in fraudulent securities' offerings

All of the following is true about proxy solicitations except Target firm proxy materials must be filed with the SEC. Proxy materials may be distributed by the target firm seeking to influence how their shareholders vote on a particular proposal Proxy materials must be filed with the SEC immediately following their distribution to investors The names and interests of all parties to the proxy solicitation must be disclosed in the proxy materials Proxy materials may be distributed by firms seeking to change the composition of a target firm's board of directors

Proxy materials must be filed with the SEC immediately following their distribution to investors

Which of the following is among the least regulated industries in the U.S.? Banking Public utilities Defenses Communications Retailing

Retailing

All of the following are true of antitrust lawsuits except The FTC files lawsuits in most cases they review. FTC guidelines commit the FTC to make a final decision within 13 months of a complaint FTC decisions can be appealed in a federal court. As an alternative to litigation, a company may seek to negotiate a voluntary settlement of its differences with the FTC. The FTC reviews complaints that have been recommended by its staff and approved by the FTC

The FTC files lawsuits in most cases they review.

Vertical mergers are likely to be challenged by antitrust regulators for all of the following reasons except when A supplier's acquisition of its customer prevents the supplier's competitors from having access to the customer. The relevant market has few customers and is highly concentrated The relevant market has many suppliers. A customer's acquisition of a supplier could become a concern if it prevents the customer's competitors from having access to the supplier. The suppliers' products are critical to a competitor's operations

The relevant market has many suppliers.

In a tender offer, which of the following is true? Select all that apply. The target's management cannot advise its shareholders how to respond to a tender offer until it has disclosed certain information to the SEC The acquiring firm is required to disclose its intentions to the SEC Target shareholders cannot withdraw their shares once they tendered them at any point during the tender offer period The bidder must accept all shares that are tendered by target shareholders even if more shares are tendered than the bidder originally wanted. The bidder need not file disclosures with the exchanges on which the target's shares are traded

The target's management cannot advise its shareholders how to respond to a tender offer until it has disclosed certain information to the SEC The acquiring firm is required to disclose its intentions to the SEC