Identifying the Pharmacological Properties of Unknown Drugs

Identifying the Pharmacological Properties of Unknown Drugs The experiment aimed to establish the pharmacological attributes of drug (B2) which is relatively unknown to many people. A more important thing to consider is the effect of Antagonistic in blocking the effects of B2. Another thing of utmost value is the question which tries to explain whether the effects and usefulness of B2 can actually be replicated in other drugs. It is paramount to understand that B2 is a drug which brings side effect as a result of interaction with the digestive substance from Pseudo-Cholinesterase. Another area of interest is the hindering of b2 effects by the introduction of an inhibitor known as cholinesterase; it is not clear whether it can actually hinder the potential effect of. The receptor factor of B2 is also considered important. Introduction There exist two categories of pharmaceutical drugs; agonist and antagonist. Agonist drugs acts on the principle that it binds itself to the receptor substance of the respective cell. Normally agonists exists in form of hormones or neurons a fact that makes them very popular in the human body. In this scenario the unknown B2 drug belongs to the agonist category. On the other hand antagonists operate on the reverse principle of the agonists in that they tend to block the receptors. In order to evaluate and asses the pharmacological properties of B2 it is vital to examine two unique properties; efficacy and potency. Efficacy refers to the overall capacity of a drug to produce the desired effects. Potency on its part refers to the level of response that is generated by a drug. The higher the potency the lower the response level of a particular drug. For instance in order to generate a 50% response value, the dosage of the drug being administered needs to quite high. The experiment is composed of two distinct phases; phase2 and phase3. Phase2 focused on establishing the effect of administering a selective antagonist dosage on the two substances; chlorphenamine and Atropine. As a result Atropine appeared to be blocked primarily because it is exhibit antagonistic attributes towards muscurinic and nicotinic receptors. On the other hand chorphenamine appeared to inhibit the effects of histamine more because it blocks autocoid histamine receptors remain blocked. In order to determine the blockage effect of B2 it was necessary to thoroughly test the selective dosage. This will allows for easier identification of the actual receptors which not works with B2 but those that blocks it affects. Another aspect examined in phase2 is related with how other agonists mimic the effect of B2. In this case it was vital to evaluate and compare the behavior of log-dose curves with the sole aim of deriving both the efficacy and the potency values. Phase 3 involved the use of pseudocholiesterase from horse blood and an esterase inhibitor known as physostigmine. Cholinesterase action involves hydrolyzing the ester bond found in acetylcholine. Basically there exists two categories of cholinesterase; acetyl-cholinesterase and pseudo-cholinesterase. Another substance used in this phase is carbachol which is rather resistant to the effect of esterase digestion. This means that its presence is used to protect or inhibit the digestion of acetycholine, histamine and B2. In addition an interaction between an antagonist like physostigmine and agonist substance will result in an increase in ED50. In some cases this can be attributed to the ever increasing potential of grugs by many people. Methods An organ bath is initially setup in presence of an ileum tissue from a guinea pig. Prior to using the tissue, a Petri dish is first filled with ringer solution and then subjected to oxygen supply. It is paramount to note that the tissue lacks any spontaneous patterns but rather it is characterized by contractions. The ileum tissue contains substances such as 5Ht, H1, nicotinic and muscurinic receptors. These substances are easily affected by contraction. In addition ileum tissue experience relaxation probably due to the fact that it lacks both beta and alpha receptors. In order to produce good result the tissue required to be attached to a transducer using a threading string. Additionally this tissue was submerged in ringerà ¢Ã¢â€š ¬Ã¢â€ž ¢s solution at a room temperature of 37 degrees Celsius. In a normal scenario the addition of an agonist may cause the ileum to contract; this tension would be amplified by the transducer, which would then record the trace of response on a computer. Each test was preceded by a complete wash out of the drug. Oxygen supply needs to quite constant in order to sustain the life of the cell. Data from the races is used to plot the graph which shows the behavior of each agonist in response to the effect of log-dose. Results For B2 laced with Chlorphenamine 1 in 10000 dilutions Emax was 98/% while ED50 was 1.0X10-6M. For B2 laced with atropine 1 in 5000 dilutions, Emax and ED50 were 4.4 x 10^-6 and 72% respectively. It is evident that competitive antagonism was dominant. It is as a result of Atropine blocking specific masculine receptors. It means that B2 is a cholinergic agonist, which might be either acetylcholine or Carbachol. Mimicry effect: B2 Gave an Emax value of 90% and an ED50 value of 1.44 x 10^-6M. The values for Acetylcholine were 60% and ED50 value of3.1 x 10 ^-6 M. However. Carbachol gave a high efficacy 100% Emax value and an ED50 value of 3.0 x 10^-6M. Additionally Histamine gave Emax and ED50 50% and4.4 x 10 ^-6M respectively. The lowest point was recorded while using Serotonin which had an ED50 value of 7.5 x 10^-6 and an Emax value of 21%. Acetylcholine in the presence of physostigmine Tthe Emax was 100% and the ED50 1.310^-7 while Carbacho was 98.4% Emax and ED501.710^-6. However in the presence of physostigmine EMAX was 100% and the ED50 was 6.010^-7. Conclusion Both the mimicry graphs of B2 and Carbachol exhibits similar characteristics hence the same ED50 values Despite this there is no enough evidence to establish what exactly what the receptors acts on. When antagonistic atropine was used the ED50 of the respective B2 was considerably reduced. This mainly occurred at both the selective and effective dosage levels. It can be concluded that B2 indeed acted on cholinergic receptors. This is given more strength by the increase in ED50 reduction in potency level. To get even more definite results chlorphenamine was used as the sole histaminergic antagonist. Results indicated that both the effective and selective dose of Chlorphenamine had no antagonistic effect on B2. Additionally the potency did not reduce. It is evident that [emailprotected] does not in any way acts on histaminergic receptors. Thus it is prudent to argue that B2 does indeed acts upon cholinergic receptors Experiment 2 Purpose: To demonstrate the pharmacological properties of unknown drug B16 Experimental phases (phase 1 and phase 2) are essential in determining these properties.Key attributes investigated include selective and effective dose of Atropine, Atropine and B2, effective and selective dose of Chlorphenamine, Chlophenamine and B2, Mimicry of B2 , digestion by pseudo-cholinesterase on B2, protection by Physostigmine of B2, and potentiation of B2. Acetylcholine is regarded as an acetic acid such as ester of choline. It acts on cholinergic synapses to propagate nerve impulses. Acetylcholine has high and equal potency for muscurinic and nicotinic receptors. It is also highly susceptible to breakdown by cholinesterase. Carbachol which is is agonist of the muscurinic and nicotinic receptors is more potent on nicotinic receptors. In addition it is not broken down by Cholinesterase. Health applications of Acetylcholine includes but not limited to the treatment of Glaucoma.Its treatment remedy is based on the contraction principle; causes contraction of circular muscle in the eye leading to an increase in output of aqueous humour. Obtained from Atropa belladonna also known as deadly nightshade, Atropine which is alkaloid in nature serves to block the cholinergic receptors. Medical applications of Atropine involve dilation of the pupil which is most common during examinations of the eyes. Another substance Chlorphenamine is rather antihistamine in nature and thus it blocks histamine receptors. It clinical uses involve the treatment of allergic reactions such as itching. (Youngson, 1999) Physostigmine is regarded as being one of those substances that tends to bring reversible cholinesterase inhibition. Since Physostigmine normally interferes with the breakdown of Acetylcholine , its overall effects is significantly ppextended. Major medical use encompasses the boosting of the muscle tone of people with Myasthenia Gravis (Youngson, 1999). Effective dose of atropine The purpose of the first experiment was to identify the effective dose of Atropine. Three doses of atropine were added to Acetylcholine; Acetylcholine with atropine 1/1000, Acetylcholine with atropine 1/10000 and Acetylcholine with atropine 1/5000. The three concentrations of atropine (1.4 x 10^-10M, 2.88 x 10^-10M and 1.4 x 10^-11M) were first carried out on both carbachol and acetylcholine. The three specimens showed a shift in the dose response curves to the right. This makes the drugs to appear to be below potent as they tend to increase their ED50 values. The results prove that both acetylcholine and carbachol are blocked by atropine. After observing results from graphs used in the experiment, it is evident that there is a distinct shift in all the dose response curves to the right. This helps to lower the potency of the drug at all concentrations. Selective dose Atropine The aim of this section of experiment is to establish whether the effective dose of Atropine is also a selective dose. In this case histamine was titrated with the three concentrations of atropine to identify if histamine is actually blocked antagonist. In a normal scenario histamine ought not to be antagonized by atropine. Instead there should not be a significant shift in the dose response curve or reduction in potency. However at high dose concentration, atropine can indirectly block histamine. To analyze the selective dose of atropine, three different concentrations of atropine were used on histamine. The 1/5000 and 1/1000 dilutions of atropine i.e.1.4 x 10^-10M and 1.4 x 10^-9M became the histamine to shift to the right. This shows that high concentrations of atropine can cause an indirect antagonistic affect to histamine. Despite this, the 1.4 x 10^-11M (1 in 10000 obtained was found to be 2.310-6M. Actually dilution does not reduce the efficacy or the potency of histamine. Additionally the dose of 1.4 x 10^-11M (1/10000 dilution of atropine) does not shift histamine to the right thus retaining its ED50 value. This dose of atropine is both effective and selective for cholinergic agonist such as acetylcholine and Carbachol. It effectively blocks acetylcholine and carbochol especially when the affect on histamine is not great. Consequently the effective and selective dose for Atropine was resolved to be 1.4 x 10^-11M. It means Atropine did not affect Histamine activity. Atropine and B16 Aim of the experiment was to find the impact of both the effective and selective dose of Atropine (110-7M) on the unknown drug B16. The effective and the selective dose were obtained by testing different concentrations of atropine on acetylcholine, carbachol and histamine. A distinct shift in the dose response curve to the right was found when administering the 1.4 x 10^-11M of atropine to unknown drug B16 there was. Therefore this dose of atropine result in drug B2 appearing to be less potent by lowering its ED50 value. It is clear that drug B2 is capable of acting upon cholinergic receptors. This is primarily because the effective and selective dose of atropine that was determined previously blocked the actions of drug B2. In effect it makes it to appear to be less potent and reducing its ED50 value. This means that Atropine was blocking Cholinergic receptors, which B2 acts on. Hence it may be deduced that B2 is a cholinergic agonist, and it may be Acetylcholine, or Carbachol. Effective dose of Chlorphenamine Experiment aim was to find out an effective dose of Chlorphenamine-an antagonist of histamine receptors. An effective dose will decrease the potency of histamine; however the same dose should not affect the Emax of histamine. Histamine when free of antagonist Emax was 100% while ED50 was 3.510-6M. However histamine when added to Chlorphenamine 1/ 10000 dilutions an Emax became 96% and an ED50 became 1.010-5M. This means that with the lesser dose of the antagonist the efficacy will be increased, while the potency will be decreased. The remarkable shift to the right confirms a decrease in potency with only a 4% variance in Emax. This is evidence that the effective and selective dose has shifted histamines Log-dose response curve to the right thus decreasing potency. Selective dose of Chlorphenamine Acetylcholine was in two different concentrations of Atropine. Chlorphenamine on its part does not result in the shift of the graph to the right. Additionaly this shift does not result in the reduction of potency. In addition, there was a small shift of the curves to the left with the addition of Chlorphenamine which may be due to re-sensitization. On the other hand as there is no shift to the right of the dose response curves with the addition of Chlorphenamine. It will be possible to realize that it is not antagonist towards Acetylcholine Effective and selective dose of Chlorphenamine on B2 The aim of experiment was to determine whether the effective and selective dose for Chlorphenamine was able to competitively antagonise the unknown drug B2. Results indicate three combinations; B2 only, B2with Chlorphenamine 1 in 10000 dilution, and B2with Chlorphenamine 1 in 5000 dilution. Consequently the display of Emax`s is 98%,92%, 100% and respectively.The respective ED50 values are 2.2 x10-6M, 1.010-5M, and 7.010-6M respectively. From the results it can be demonstrated that the effective and selective dose of Chlorphenamine did not have any considerable effect on the drug B2.This shows that B2 is not acting on the autocoid receptor H1. Mimicry of B2 with other muscurinic agonists Aims to study the mimicry effects of muscurinic agonists as wellas study parallel efficacy and potency of unknown drub B2. The mimicry data appears to express that B2 mimics Carbachol as it has a similar ED50 value. In essence, B2 gave ED50 90% and Emax 1.44 x 10^-6M while Carbachol was ED50 100% and Emax 1.00 x 10^-6M. That saids it is not enough proof to ascertain that B2 acts on receptors. The cholinergic antagonist Atropine was used because whenever it decreased the ED50 of B2 at the effective and selective dose then this would confirm the B2 acted upon cholinergic receptors. An affirmative result proved that B2 acted upon cholinergic receptors as the ED50 increased and the potency decreased. In order to confirm this, Chlorphenamine was used as a histaminergic antagonist. The effective and selective dose of Chlorphenamine had no antagonistic effect on B; it failed to reduce the potency. It means that B2 does not act upon histaminergic receptors. Thus it can be concluded that drug B2 acts upon cholinergic receptors Digestion by pseudo-cholinesterase/protection by physostigmine The effects of Acetylcholine explain that when presented alone a 100% response is guaranteed.. In another perspective, Acetylcholine by pseudo-esterase gave a 0% response. However with the addition of Acetycholine, esterase, and physostigmine 95% response was acquired. Basically it means that Acetycholine is prone to the digestion by Pseudo-Cholinesterase obtained from the horseà ¢Ã¢â€š ¬Ã¢â€ž ¢s blood. Additionally it is protected from being digested by physostigmine. When carbachol was treated with both blood esterase and physostigmine each every response was almost identical yielding only a 10% discrepancy. Evidently is not in any way capable of being digested into blood esterase. As a result, physostigmine is not suitable to be used to block the digestive effects of the esterase. Other results (from graphs 1.5,1.6 and 1.7) indicate that B2 was indeed broken down by blood esterase suggesting that it is potentially digestible by the former. Indeed if blood esterase were to be added to drug B2 alone, esterase would immediately digest drug B2 reducing its reaction to approximately 0%. However when an indirect agonist such as physostigmine is used, drug B2 is capable will be able to produce a significant. One thing to note is that the blood esterase virtually broke down all of drug B2. Relevant indications appear to reveal that the concentration of drug B2 is slightly low. This explains the minimal response of drug B2 to blood esterase. Another substance that was broken down and digested by blood esterase was acetylcholine. Additionally, physostigmine effectively inhibited the effects of the blood esterase on both acetylcholine and drug B2. This result helps to explain the mimicry phenomenon; drug B2 mimics the procedures of acetycholine as well as acting upon the cholinergic receptors. By studying graph 1.8, there is revelation of the effects of histamine when treated with both blood esterase and physostigmine. From the data available it is evident that all four responses appear to be quite identical with only a 5-10% discrepancy. Graph 1.7, reveals that blood esterase does not digest histamine. This means that histamine would need physostigmine in order to block the digestive effects of the esterase. Potentiation From graph 1.9 it appears that physostigmine is acting as an indirect agonist towards Acetylcholine. This is because there is an obvious potentiation;the Emax leaped from 86.2% to 100% while at the same time the ED50 increased slightly with a shift left from 1.310^-7M to 3.010^-7M In graph 2.0 there is no potentiation of Emax or ED50. This helps to explain the fact that physostigmine does not work as an indirect agonist towards Carbachol. In essence the Emax for both trails are almost identical the same as for ED50 which runs very close Physostigmine raises thee Emax but fails to lower the ED50. It is manifested by the fact that physostigmine acts as an indirect agonistThere is increased level of Emax to B2 mainly due to re-sensitisation occuring through-out the experiment as well as biological variance of the tissue Summary The antagonist Atropine appears to act on the unknown B2 drug which is associated with bringing about competition for inhibition factors. The same case applies to B2 cholinergic agonist. In another analysis Chlorphenamine appears to lack proper antagonistic effect on B2. Again B2 fails to directly act on autocoid H1 receptors. From these findings it is evident that B2 is a Cholinergic Agonist. The fact that carabcol and histamine were not digested in blood esterase while acetylcholine got digested means that B2 is indded acetylcholine. The two attributes provides some of the unique agonistic properties of a pharmacological drugs.

Energetic Costs Of Load Carrying Health And Social Care Essay

Many animate beings if non all will in some point in be transporting a burden which is an add-on to normal organic structure weight either through transporting one of their immature like most Primatess. Or necessitating to transport excess organic structure weight for migration which is seen in many birds which do so to last the long distances that they must go without feeding. The energetic costs on the animate beings is the sum of energy that is required to transport the excess burden around with them and how much of a disability it is on the animate being if any. E.g. how it affects the animate being ‘s velocity, the animate being ‘s ability to travel ( mental dexterity ) and how it affects the animate being ‘s behavior. This energetic cost may change with relevancy to weight or it may be influenced by the manner in which an animate being carries a weight e.g. in Primatess is it more energetically feasible to transport the immature on the dorsum or forepart of th e parent. Different species of animate beings have evolved different methods of transporting tonss which is influenced by their morphology, the manner in which they move and how the carnal interacts with its environment. Bumble Bees ( Bombus ) for illustration collect pollen on their legs in pollen baskets to convey back to the settlement [ 1 ] whilst other animate beings like emperor penguins ( Aptenodytes forsteri ) will transport nutrient in their tummies and regurgitate it for the immature. Load transporting may give an animate being an advantage whether it is more protection for the immature e.g. Marsupials have evolved a pouch to transport immature, or being able to transport resources back to the settlement which is seen in most species of emmets in which some species like the Leafcutter emmet ( Atta cephalotes ) can transport loads manner over their ain organic structure weight. Load transporting can hold a large affect on an animate being ‘s organic structure, some wi ll increase their organic structure weight dramatically during certain times like the silvertip bear ( Ursus arctos horribilis ) which must construct up its organic structure mass during the summer months in order to last hibernation during the winter. An animate being ‘s organic structure must be capable of digesting the excess weight without for good damaging the animate being ‘s organic structure. Permanent harm is sometimes caused in worlds ( Homo sapiens ) from inordinate burden transporting even when antecedently warned which can take to deductions subsequently in life. It seems that some animate beings like A cephalotes can transport tonss that are much heavier than themselves for long distances of clip without any foreseen harm to the carnal whilst others like H sapiens may bring down hurts on themselves making so. It is certain that some animate beings are much better at transporting tonss than others nevertheless the forfeits that they make for this ( if any ) may detriment the animate being in another facet of its abilities as an animate being can non be good at everything. A cephalotes may hold a strong organic structure design in footings of transporting tonss nevertheless they may be hapless swimmers as a consequence of their design for transporting tonss. Another animate being that has a strong design in being able to raise and tunnel through things is the Rhinoceros Beetle which is portion of the household Scarabaeida and are one of the largest species of beetles around making 6cm in length. [ 2 ] When a male encounters another male the two beetles will contend, it is done by the two beetles meshing their horns together and utilizing their strength to seek and raise their opposition up and throw them aside. For an animate being to raise a equal and throw them aside with such easiness it must hold a batch of strength in proportion to organic structure size. Rodger Kram wanted to see whether the metabolic rate of Rhinoceros Beetles in creased as the burden that the beetles carried increased [ 3 ] . The experiment consisted on the beetle walking in a respirometer chamber whilst on a treadmill carry weights up to 30 times is body mass. Kram found that the beetles could transport the tonss cheaply and that the energy ingestion had doubled merely when the beetle was transporting a burden that was equal to 10 times its organic structure mass [ 3 ] . R Kram argues that this may hold been down to the manner in which the beetle moves and its limb position during walking nevertheless Kram finds no grounds for this. This difficult to believe as the beetles legs and motion must hold undergone some natural choice force per unit area for burden carrying and the life manner of the beetle. Kram assumes that the beetles ‘ life manner of tunneling through decomposing stuff such as wood [ 4 ] and combating other males for couples may hold had generated natural choice for the ability to transport heavy tonss and exert strong forces. Should this be considered for all arthropods and that all are really good burden bearers, capable of transporting tonss past their ain organic structure weight. For illustration cockroaches are besides capable of transporting tonss equal to their ain organic structure mass and this lone increases their metabolic rate by 50 % . [ 5 ] However some orders like Hymenoptera would be unable to transport weights greater than themselves particularly in the air as they are so finely balanced in flight. Martin Burd found that leaf-cutting emmets do non maximise single energetic efficiency and that they try to rate-maximize and increase the sum of fragments that enter the settlement. [ 6 ] The emmets think like the settlement that they are and look at the overall settlement energetic efficiency and seek to maximise it which is non through taking the largest foliage fragments. Hermit pediculosis pubis ( Coenobita compressus ) are another arthropod and possibly hold to bear a greater burden than most animate beings as they carry their shells around with them. Hermit pediculosis pubis will travel from shell to blast as they get larger to better accommodate their size. Herreid II, C. F. and Full, R. J. [ 8 ] step the energy needed for anchorite pediculosis pubis to travel with and without shells at different speeds. The experiment showed that when the pediculosis pubis had no shell and were resting at that place was no significance difference between the 1s with shells. However when the pediculosis pubis were running pediculosis pubis with shells required significantly more energy than unshelled 1s. It was besides found that anchorite pediculosis pubiss are particularly good at transporting tonss that were four times the mass of the crab and that the volume of O used did non increase. No unequivocal reply could be made for this nevertheless it was noticed tha t the pediculosis pubis that carried big shells shifted their leg places to let them to on occasion drag the shell. This intern allowed the pediculosis pubis to bear the excess weight without utilizing inordinate sums of energy. Clyde, Herreid and Robert besides looked at how the sum of limbs a anchorite crab had affected the energy needed to travel with and without a shell by cut offing a certain figure of legs off several pediculosis pubiss. They found that the volume of O used increased when running nevertheless they were non satisfied with the consequences as instability may hold had affected the pediculosis pubis which would be corrected over clip. When animate beings carry a burden they may follow a different position to counterbalance for the excess weight to do it more energetically efficient, this could be in the form of the organic structure or in the leg motion and the manner in which they move with the weight. J. R. Grote [ 7 ] carried out and experiment looking at the consequence of motive power on spiny lobster. He classified a laden spiny lobster as being out of the H2O and an unloaded spiny lobster being in the H2O and so looked at how the place of the legs changed. When the spiny lobster were out of the H2O the legs moved into the organic structure this made the distance of each measure shorter leting the same force to be used nevertheless over a shorter distance counterbalancing for the excess weight. The spiny lobster are more at place in the H2O where the burden of their organic structures does non impact them nevertheless they are capable of accommodating to the state of affairs with alterations in its position to expeditiously transport themselves. The weight of a burden is non ever every bit of import as the type of burden that an carnal carries, one type of burden may be well more hard to transport than another or a burden may hold a stimulation on the bearer in some manner triping it to utilize more energy for illustration. [ 9 ] An experiment looking at the consequence of lading on honey bees Apis mellifera found that the when a bee would lade itself with either pollen or nectar that the bees flight metabolic rate would increase but merely at a little degree in comparing to the sum of burden that was carried. However when the bees were vibrating the bees that were scrounging for pollen were on mean 10 % more metabolically active than bees looking for nectar. The survey [ 9 ] could happen no biomechanical ground behind this and proposed that the forage bees are more actively stimulated by the pollen forage than the nectar forage bees. The survey [ 9 ] concluded that the bees find the aggregation of pollen a more rewarding re source and work harder to roll up it or that pollen foragers have a higher metabolic rates to roll up pollen in the colder forenoons when it is most likely done ( based on J. Fawells observations ) . [ 10 ] For animate beings to be able to migrate they must hold a beginning of nutrient for the journey whether this is pit Michigans along the manner or conveying their nutrient along with them on the journey as excess organic structure weight which can be used as energy. Or an animate being may take to make both and non turn down the chance of nutrient along its migratory path The Red Knot ( Calidris canutus ) is one bird that migrates long distances during different times of the twelvemonth. The Red Knot will construct up energy militias in organic structure mass before it migrates. How transporting big fuel tonss affects sustained flight Red Knots was investigated in a survey [ 11 ] which found that the metabolic power used increased in proportion to organic structure size. It besides found that the flight musculus efficiency increased besides to counterbalance for the weight. The Red Knott adjusts its musculus size to give maximal efficiency in relation to its weight [ 12 ] and helps th em to keep maneuverability and the velocity which they can take off important for avoiding marauders such as Peregrine Falcons. Depredation is a twenty-four hours to twenty-four hours concern for most animate beings and all have their ways of get awaying being eaten for birds go uping every bit high as possible above the marauder and winging fast to derive the advantage or doing for screen where it can non be reached with easiness. Many birds have their ain person schemes nevertheless this is what the black raspberry [ 13 ] ( Sylvia atricapilla ) uses. A survey [ 13 ] looking at how body fat affects the black raspberry found that as the sum of weight increased the return off speed decreased being hampered by the excess weight gained. Besides the angle of speech pattern decreased with weight both holding a negative consequence on the birds ‘ public presentation. However the black raspberries could digest the excess weight up to around 30 % of the original organic structure mass without holding a excessively greater consequence on the public presentation. Merely when burden reached about 40 % was the affe ct great on the bird ‘s speed and angle of accent [ 13 ] . The survey suggest that migratory birds transporting big fat tonss will hold a hampered ability to get away marauders and with mention to [ 14 ] is the ground why passeriform bird birds with 50 % or more organic structure weight are merely found when they are fixing to do a big journeys in their migration, necessitating them to hold the excess fat. In order for person to understand the effects of lading on an animate being ‘s public presentation they need to look at the interior workings of the animate being so that a better apprehension of what is go oning to the animate being can be seen at different degrees. David J. Ellerby and Richard L. Marsh [ 15 ] decided to look into how blood flow, cardiac end product and O ingestion alteration in a guinea poultry ( Numida Meleagris ) leg musculuss and how the different types of musculus behave. The experiments consequences were non surprising and found that blood flow to the musculuss increased when the burden was bole loaded or distal limb loaded and the animate being was running. Resulting in a 15 % addition in metabolic power above the control which was unloaded. Cardiac end product and net O ingestion besides increased, with both tonss organ blood flow was besides step and was found to drop significantly when the animate being was loaded ( bole & A ; Limb ) and running. At the same clip there was a decrease blood flow to flight musculuss [ 15 ] . This supports most modern theories that blood is taken off from countries around the organic structure which are non in the greatest demand for it and are given to countries which are. Depending on where the burden was on the guinea poultry affected the blood flow, if the burden was positioned on their dorsums ( bole ) the musculuss that are used for stance had an increased blood flow and more so than the musculuss used in the swing stage of leg motion. If the burden was so moved to the distal Load ( lower leg ) the blood flow increased in both stance and swing musculuss nevertheless less stance musculuss had increased blood flow and more swing musculuss did. Looking at the finer inside informations of how load carrying effects an animate being ‘s allows us to better understand the internal alterations that an animate being makes when bearing a burden instead than merely looking at the external effects. Load bearing itself varies in so many ways from the carrying of immature to the excess weight needed to last migration for some animate beings it is a affair of endurance. The manner in which transporting a burden affects the energetic cost on an animate being and how it affects its organic structure or head is different for each species. To some animate beings load transporting can be a large hinderance ( e.g. birds ) which rely on being light weight for flight. An animate being ‘s environment and life style must be the selective force per unit area behind its ability to bear weight as seen in Rhinoceros Beetles. It is clear that some animate beings are better at bearing a burden than others like the Rhinoceros Beetle capable of transporting a weight up to 30 times its ain organic structure mass it is obvious that other species like H sapiens would be unable to bear such a weight. Is this down to what sort animate being it is e.g. are arthropods better than chordates at bearin g tonss? It is difficult to state by looking at merely a smattering of animate beings which animate beings are better as there will ever be exclusions of the groups. If animate beings are better than other animate beings what is it that makes them better is it the design, motion manner, transporting method, blood flow, stronger musculuss ECT. One thing that is evident is that there is no individual ground or account behind bearing a burden and the ground for the energetic costs of burden transporting are many and complex.

Where to Find Compare Old and New Jim Crow Essay Topics

Where to Find Compare Old and New Jim Crow Essay Topics Compare Old and New Jim Crow Essay Topics - the Story The Museum also provides an extensive timeline of the African American experience in the usa. In truth, it's merely a covert variant of the one you are able to read all about in Lee's To Kill a Mockingbird. He was, in reality, the most fascinating character in our western history. It's funny to be aware a replica of the identical social injustice in the present world today. It's almost impossible to know how good or bad something is, if there is not anything readily available to compare it to. Compare Old and New Jim Crow Essay Topics - the Story One-fourth of the amount of prisoners on the planet are Americans even though the usa makes up for just 5% of the world's population. The USA now has the maximum incarceration rate in the Earth, and many the incarcerated are a racial minority. Crime rates in america have dropped below the global average. In reality, prisons create more crime instead of deter it. While statistics reveal that racial profiling does exist and doesn't reflect actual crime prices, it continues unabated. The variety of Africans in prison is comparatively high in regard to the amount of white law breakers in the prison. Lots of people in the usa complain about the growth of immigrants in the nation but don't realize there are lots of jobs natives are unwilling to do. It's more difficult to earn money, get work, go to school, and due to that, many individuals resort to selling drugs. There isn't any reason to punish the criminals severely. American society has a duty to confront that which we have done and are doing to people of color even if it's uncomfortable to achieve that. Additionally, lawyers utilize peremptory strikes, where they're able to legally discriminate and exclude people of color and utilize race neutral language to achieve that. The people believe that the blacks are liable for fast spread of the disease. Alexander believes there's too little understanding of how serious the matter of incarceration is. There's a reversal of tone to anger and went to find the kid. There isn't any reason to punish the criminal severely. Instead, it's a racial issue. Statistics say that, most probably, you will be judged through an all-white jury, although jury selection ought to be by definition colorblind. Reading example essays works the exact same way! There are a lot of forms of essays, it isn't difficult to get rid of an eye on all your writing assignments. If you don't find out how to begin your essay or where to search for supporting data, we'll be pleased to help you. It is crucial to not forget that the Democrats and Republicans of the late 1800s were rather different parties from their existing iterations. To give just a little background on segregation and racial disparities, we'll look into the way that it was viewed in the united states in the era of racism. They cannot vote to elect the men and women who will make the rules that regulate their lives. The history of black segregation is extremely old that any history on the planet. Justice itself is not present in certain locations, and crime may be wholly justified on an individual's upbringing. Social injustice is easily the most controversial topic in the majority of modern democracies. This is the point where the actual use of the War on Drugs lies. History is quite clear on the increase and eventual fall of the segregation laws in the usa. Using Compare Old and New Jim Crow Essay Topics Most felons cannot find public housing and it's not possible for them to vote. Respect for most human beings is the foundation for a great many justice in the present day in the society. The penal laws are the not the most suitable means to way as a way to promote social justice in the present day society. This wasn't a simple job. Life After Prison The caste system caused by mass incarceration extends outside the prison walls. On the contrary, it's the public perception and comprehension of the function of race itself. We have to work to end the present prison system, as it is currently creating a lot more crime than it is locking up.

Cross Border Mergers And Acquisitions Finance Essay - Free Essay Example

Sample details Pages: 30 Words: 9102 Downloads: 8 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Merger and acquisition aim at facilitating two companies achieve certain financial objectives. The dissertation aims at giving an insight about the motives of mergers and acquisitions which includes motives that aim at increase or decrease of the shareholders value and also its impact on the shareholders value. The motives of the mergers and acquisitions include synergy, diversification, growth, economies of scale and scope, improvement of managerial efficiency, reduces competition, market expansion and acquiring new technology etc. Don’t waste time! Our writers will create an original "Cross Border Mergers And Acquisitions Finance Essay" essay for you Create order Further, studying the effect of motives on Mergers and Acquisitions and also providing a deeper knowledge about it and examining them from the point of view of the four approaches involved in the literature review. Lastly, this dissertation includes the study of two cases involving a merger and an acquisition of two companies using the quantitative method i.e. an accounting study which examines the pre and the post MA financial performance of the companies involved. It also includes comparing the post financial performance with a competitive company in the same industry. The two cases studied involved acquisition of BellSouth by ATT and merger of T-Mobile and Orange Mobile with their financial performance being compared with their competitors i.e. Verizon and O2 respectively. According to the findings in the literature review, the company performs better before a merger and acquisition but the acquiring company has to bear loss after the MA. CHAPTER 1: INTRODUCTION MA are almost the same corporate actions. It is a process of combining two previously individual firms into a single entity. To improve companys performance and long term value of the shareholders funds are the significant operational advantages that can be obtained by mergers and acquisitions. A companys motivation to pursue a merger or acquisition benefits from economies of scale; higher revenues and market share in the market, higher tax efficiency and broadened diversification. However the underlying business rationale and financial methodologies are substantially different for mergers and acquisitions. A mutual decision of two equal companies coming together and becoming one entity is called a MERGER. It helps in cutting cost, increasing profits, increasing shareholders value for both the companies shareholders. Therefore, a typical merger involves two equal companies coming together with a goal of forming a company which has a value more than the sum of the two companies individually. In this process the shareholders get the equal amount of shares in the new entity as they had in the old entity. Whereas a takeover or an acquisition is the purchase of a smaller company by a much larger one. Even a non-mutual decision and a concept on unequal can produce many benefits similar to a merger. The larger company can initiate a hostile takeover of a smaller firm and then essentially buy it from the smaller companys management. Unlike in merger, in acquisition, according to the conversion ratio the acquiring firm either offers cash price per share to the shareholders or the acquiring firms shares. 1.1. BACKGROUND OF MERGERS AND ACQUISITIONS THE GREAT MOVEMENT OF MERGER AND ACQUISITIONS The great Merger Movement happened from 1895 to 1905.It was a U.S. business phenomenon. During this period small firms consolidated with the large firms as they had a bigger market share and dominated the small companies. Around 1800 of the firms disappeared in these consolidations. Trust was used as a vehicle. This movement was very big, in the year 1900 the firms that merged had the value as 20% of the GDP,then it decreased in 1990 to 3% ,further leading to a rate of 10-11% of GDP in around 1998-2000.By 1929 smaller competitors joined forces with each other which disintegrate ,this was observed by the organisations that had the greatest share in the market in 1905.Due to growing technological advances of their products, patents and brand recognition by their customers some companies like DuPont,Nabisco,US steel and General Electric have been able to keep their dominance in their respected sectors. The consistent mass producers of homogenous goods were the companies that merged; the y could lead to exploiting the efficiencies of the large volume production. Companies with fine products didnt take part in the Great Movement other than that they earned high profits and margin on the fine products like fine writing paper. SHORT RUN FACTORS The desire to keep the prices high is one of the short run factors in The Great Merger Movement that is why with so many firms the supply of the products remains high with the high prices in the market. In 1893, the demand for the goods declined, thus, according to the classic demand and supply model with the fall in demand the prices of the goods fall. By colluding and manipulating supply to counter the changes in the demand for a good, the firm could avoid the decline in prices. This lead to horizontal integration. Mass production lead to reduction in the unit costs to a lower rate. The new machines were usually financed by bonds, which lead to a panic in 1893 as the interest rate on bond was very high even then no firm agreed to reduce the quantity as they were capital intensive and worked on fixed cost basis. LONG RUN FACTORS In long run, companies work on reducing the cost thus it was better for the firm to reduce the transportation cost by producing and transporting products from the same location. Also, the technological changes lead to increase in the efficient size of plants which are capital intensive and allow economies of scale. The initial successful mergers were dismantled eventually due to the part of the government and also the competitors. The US government passed the Sherman Act in 1890 setting rules against price fixing and monopolies. The large companies were attacked for strategizing with others or within the companies with the aim of maximising profits. A great incentive for companies to unite and merge resulting in them not being competitors anymore was created by fixing prices with competitors. CROSS BORDER MERGERS AND ACQUISITIONS The currency of the target corporation appreciates by 1% as compared to the acquirers, as a result of the large MAs, this being the result of the study done by Lehman brothers in the year 2000.It was observed that after a merger there is a big upward shift in the currency rate, then after fifty days it stabilizes to 1% stronger average rate. The cross border MA increased because of the rise in the globalization. There were 2000 cross border MAs in the year 1996, these transactions were worth $256 billion. Majority of small and mid-sized firms didnt consider Cross border intermediation due lacking of significance and strict national mindset.This was the reason that did not let the academic work develop much. This has mostly been unsuccessful because of the broad term. It is a very complex term, where corporate governance, power of average employee, company regulations, political factors and countries culture are the crucial factors that spoil the transactions. The cross border MA helps in expanding the companies at the global front and create high performing businesses and cultures across national boundaries. Even companies with headquarters in the same country that merge are of this type. Swiss drug makers Sandoz and Ciba-Geigy were a $27 billion merger which is supposedly single mergers and was also a cross border merge r. Based on the merger activities the business world is divided into six merger waves as detailed below: TABLE 1: TYPES OF WAVES PERIOD NAME FACET 1897-1904 First Wave Horizontal mergers 1916-1929 Second Wave Vertical mergers 1965-1969 Third Wave Diversified conglomerate mergers 1981-1989 Fourth Wave Congeneric mergers, Hostile takeovers, Corporate raiding 1992-2000 Fifth Wave Cross border mergers 2003-2008 Sixth Wave Shareholder activism, Private Equity,LBO The table has been taken from (https://en.wikipedia.org/wiki/Mergers_and_acquisitions#1990s) The top merger and acquisition in the 1990s was Vodafone and Mannesmann which had a transaction value of US $183 billion and in 2000 was fusion of AOL with Time warner where the transaction was worth US $164.747 billion. 1.2. MERGERS According to the Oxford Dictionary merger means combining of two companies into one. Fusion of two or more entities where the identity of one or more is lost. The assets and the liabilities of the companies are vested into another company and the shareholders of both the companies become shareholders of the new entity formed. In consideration of the payment of the following: Equity shares in the transferee company Debentures in the transferee company Cash Mix of the above things All the assets, stocks and liabilities of one company are transferred to the transferee company. Example of a merger is when Daimler-Benz and Chrysler ceased to come together in 1998 to form a new company called Daimler Chrysler. 1.2.1. TYPES OF MERGERS: Horizontal Mergers: Two companies that share the same product lines and market, in direct competition. For example. Unilever acquired Lipton tea in 1972; ICICI bank acquired Bank of Madura Limited in all stock deal in 2001. Vertical Mergers: Its when a company and a customer or a supplier and a company merge. For example: Time Warner Incorporated, a major cable operation, and the Turner Corporation, which produces CNN, TBS, and other programming. In this merger, the Federal Trade Commission (FTC) was alarmed by the fact that such a merger would allow Time Warner to monopolize much of the programming on television. Ultimately, the FTC voted to allow the merger but stipulated that the merger could not act in the interests of anti-competitiveness to the point at which the public good was harmed. Market Extension Merger: When two companies that merge together sell same products in different markets. For example: market extension merger i.e. the acquisition of Eagle Bancshares Inc. by the RBC Centura. Eagle Bancshares is headquartered at Atlanta, Georgia and has 283 workers. It has almost 90,000 accounts and looks after assets worth US $1.1 billion. Conglomeration: When two companies with uncommon business areas merge. For example: DCM and Modi Industries. Mergers can be distinguished on the basis of how they are financed. They have implications on the company and the investors involved; which is discussed as follows: Purchase Mergers: This kind of merger occurs when one company purchases another company either by the means of cash or by issuing some debt instrument. Acquiring companies get the tax benefit from this merger, thus prefer it over the rest. The taxes can be reduced annually as the difference between the book value and the purchase value depreciates annually. Consolidation Mergers: In this a brand new entity is formed, where two companies are bought and combined under this. This merger is also taxable. 1.3 ACQUISITIONS Acquiring the ownership in the property is known as acquisition. In business context, an acquisition is one company purchasing the controlling interest in the share capital of another existing company. It is an attempt of one firm to gain majority interest in the other i.e. the target firm and by small group of investors take the target firm private or either disposes off its assets. The target company can be bought by the company either by the means of cash, stock or the combination of both. Whereas it is also possible, common in small deals, that is, when one company acquires all the assets of the other. Factors that affect an acquisition: Purchasing shares in an open market Make takeover to the general body of shareholders Private treaty purchasing new shares Acquisition of share capital by the means on cash, issuance of loan capital or insurance of share capital. Agreement with the members of board, major shareholders commanding voting power, i.e. the people holding the major interest in the companys management. Issue of dividends i.e. had to release as said that it would not pay dividend but released it due to potential threat of acquisition. TYPES OF ACQUISITIONS: There are two kinds of strategies that can be applied in acquisition, they are: FRIENDLY TAKEOVER: A financial proposal made by the acquiring firm to the target firms management board involving consolidation or merger of the two firms, or creation of a parental or subsidiary relationship. HOSTILE TAKEOVER : It is accomplished either by a tender offer or proxy fight. Acquisition of one company by the other company, not through an agreement but by forcing the companys shareholders to replace the companys management. 1.4. Benefits of Mergers and Acquisitions: MA benefit the shareholders in the buying company by offering premium to induce the mergers and acquisitions. This premium increases with the growth of the company. Mergers and acquisitions are a joint decision of the managers, shareholders and the promoters of the combined company. The advantages and the disadvantages of a merger or an acquisition is discussed as follows: From Shareholders point of view : As the owner of the company, shareholders should benefit from the mergers and acquisitions. Shareholders expect that when the companies have merged the investments made by them enhance depends as the shareholders may not precise the other company as a benefit. As they give rise to greater values by sale of shares from one companys shareholders to another and holding investment in shares. Advantages to a shareholder on merger or acquisitions are as follows: Increased face value of the shares if no dilution. Increased return to the shareholders i.e. increasing shareholders wealth. One companys shareholders can sell their shares to another companys shareholders. Better investment opportunities for the shareholders. Expenditure of other companies. Barriers to entry should be using the forecasts. From Managers point of view : They are concerned with improving the operations of the company, growth of the company providing better deals to raise their status, perks; they might have shares in the company and fringe benefits. When theres a guaranteed outcome of the stated things, the managers support the merger. From Promoters point of view : Increase the size of the company, financial structures and the financial strength. The closely held private limited companies can get converted into public limited companies due to mergers without contributing much of wealth and promoters losing control over the company. From consumers point of view: We can measure the benefit of the merger by the increase or decrease of the economic and productive activities which directly affect the degree of welfare i.e. provision of minimal wellbeing of the consumers by changes in the quality of products, price level and after sales service. The aim is not always increasing market growth it can depend on the level life cycle production is at. Advantages to a consumer from mergers and acquisitions are: Lower price and better quality goods : The economic benefits that a company get from mergers and acquisitions lead to low price, also the promotional changes and better quality goods for consumers. Improved standard of living of the consumers : Low price of products and improvement in quality automatically improves the standard of living of the consumers. DRAWBACKS: MA lead to concentration of economic power and these merged entities lead to a dominant position of market power. Also, after merger because of the dominance the entity suffers from deterioration in the performance over the years. The disadvantages of mergers and acquisitions are as follows: Monopoly: Two companies that merge together tend to lead to reach the domination position hence create a monopoly in the market. Corporate debt levels can rise to dangerous levels as it might have a backer and also the amount of loans taken by the company. Damages the morale and the productivity of the firms. Managers have to forego long term investments to get short term profits. It is possible that lesser dividend is given to the shareholders if the company is making losses, also less returns on investments if the company is not making enough profits. Corporate raiders control to make quick profits, strip assets from the target and destroying company leading to throwing people out of work. It is possible that a company doesnt throw the people out for example Virgin doing low cost flights to North of England when used to do trains, they instead became unemployed. 1.6. Aim of the dissertation; The various aims of the dissertation are as follows: Firstly, to know the basic meaning of a merger and an acquisition. Secondly, to know why would two companies opt for a merger or an acquisition i.e. the motive behind a merger or an acquisition. This explains the factors that would lead two companies to merge or take over another company. Thus, I will look at the various factors like role of synergy, agency problem, cash flow, and increase in the market power, regulation, economic factors and government influence which influence the managers to merger their company with another company or acquire another one. There are different motives like growth, synergy, and economies of scale etc. to shareholders, managers, promoters and customers which are also discussed in this report. Also, the effects of the motive of Mergers and Acquisitions on the company post it are also investigated. To do the investigation Ill take into consideration two case studies ,which are as follows : Case study 1: This includes the study of the acquisition of BellSouth by ATT. Case study 2: This includes the study of the merger of T-Mobile and Orange. 1.7. RESEARCH METHODOLOGY The research methodology used in the dissertation is an accounting study, which is explained further. The companys i.e. T-Mobile, BellSouth, ATT, O2, Orange Mobile and Verizons annual reports and some online data are used for the analysis of the company before and after the merger. This research also involves the study of the changes in financial performance due to Mergers and Acquisitions. Thus, this involves calculation of these three financial ratios i.e. profitability ratios, liquidity ratios and activity ratios and then comparing the company after the merger or acquisition with another company in the same industry; this is done to control the factors like firm specific, industry specific and economic worldwide. CHAPTER 2: LITERATURE REVIEW 2.1. Motives behind Mergers and Acquisitions: The past studies and researches done show that Mergers and Acquisitions have various motives, where Andrade et al. (2001) summarised it as Efficiency-related reasons that often involve economies of scale or other synergies; attempts to create market power, perhaps by forming monopolies or oligopolies; market discipline, as in the case of the removal of incompetent target management; self-serving attempts by acquirer management to over-expand and other agency costs; and to take advantage of opportunities of diversification, like by exploiting external capital markets and managing risk for undiversified managers George Coontz04 states The motive is to increase profitability and shareholder wealth by an increase in the price of the stock. An increase in price means an increase in the shareholders wealth. There are various reasons for mergers and acquisitions, which are as follows: Growth: The most common reason for merger is growth. It can be divided into two broadways: Internal growth: It is much cheaper and less risky for a company to merge and expand internally. It is much faster to grow by acquisition than internally. External growth: Diversification is an external growth strategy. If an organisation operates in a volatile industry then it might opt to hedge the fluctuations by undertaking a merger. This also involves geographical diversification i.e. when one company acquires or merges with another company in some other country or location. It means expansion in the current market and in the new market, also by increasing the product range and services. Synergy: Another reason for merger is synergic benefits. This is the most commonly used word in Mergers and Acquisitions, for increasing performance and reducing cost of operations by combining the business activities. Two businesses merge together if they have complementary strengths and weaknesses i.e. It follows the financial maths 1+1=3. This shows that the value of the two firms combined is much more than the two of them operating independently. Can be written as, Val (A+B) Val (A) + Val (B) There are two forms of synergies derived from: Cost economies: They help eliminating duplicate cost factors such as redundant personnel and overhead. These lead to lower per unit costs. Revenue enhancement: This is when one companys marketing skills combine with the other companys research process to significantly increase the combined revenue. Synergies are positively correlated to Mergers and Acquisition. This means higher the synergy, higher the target gains as well as the acquiring firms shareholders benefits (Berkovitch Narayanan, 1993). There are three types of synergies: Operational synergy: This is achieved by earning operational profits which is done by linking assets of the companies together to be used for various purposes. Operational synergy can be achieved by one company by opting for a merger or an acquisition by eliminating its weakness i.e. for example if a company has a strong production department it can acquire a company with a good supply chain thus resulting in the company to be stronger. As stated in Copeland et al. (2005, p 762) ,The theory based on operating synergies assumes that economies of scale and scope do exist in the industry and that prior to the merger the firms are operating at levels of activity that fall short of achieving the potential of economies of scale. In other words, operational synergy can be achieved by economies of scale or economies of scope. Financial synergy: This includes when two companies after a merger or an acquisition achieve high return on equity, right to use larger and cheaper capital market. Mergers and acquisitions also provide tax benefits, which is a financial synergy. Example of financial synergy: Mitsubishi and Bank of Tokyo. When the capital of two unrelated companies is combined and results in the reduction of cost and a higher cash flow that is also called financial synergy (Fluck Lynch, 1999; Chatterjee, 1986).It is stated that financial synergy, on average, tends to be associated with more values than do operational synergies (Chatterjee, 1986, pg. 120) Managerial Synergy: When two companies come together it is possible that one of the companys has better and well skilled managers than the other company. Thus, the managerial synergy helps in forming a new firm with expertise and thus leading to an improved performance of the company. Diversification: Diversification is when that a company goes through a Merger or Acquisition with a company which is from an unrelated industry. This helps in reducing the impact of one particular industry on the profitability of the new entity and also spreads risk in terms of climatic change and consumers tastes. Diversification has not been very successful except for a few companies like General electric, which grew and enhanced the shareholders wealth. The reason of engaging in MA is to reduce the top managers employment risk, such as the risk of losing job and risk of losing professional reputation (Amihud Lev, 1981). Many large firms seek to achieve diversification by MA, rather than internal growth. (Thompson, 1984; Levy Sarnat, 1970).According to Seth et al. (2000.p 391) In an integrated capital market, firm level diversification activities to reduce risk are generally considered non-value maximising as individual shareholders may duplicate the benefit from such activities at lower cost. Economies of scale Economies of scope : Size is one of the important factors in MA. A larger company benefits more from a merger in the form of cost reduction than a small company. The purchasing power and the companys negotiation power improves after the merger i.e. the larger the company higher the chance to negotiate the price of products with suppliers and to ensure to not spoil the relations with the suppliers although the orders maybe inbuilt. This basically concludes that new entity reduce the duplicate operations lowers costs thus higher profits. The economies of scale refers to the average unit cost of production going down as production unit increases (Brealey et al. ,2006 ;Seth,1990).The economies of scale is the goal of horizontal and conglomerate MA. An economy of scope implies higher the number of products the less is the cost of production. The feature of economies of scope is more suitable for vertical MA in seeking vertical integration (Brealey et al., 2006). In addition, complementary resources between two firms are also the motive for MA.It means that smaller firms sometimes have components that larger ones need, so the large companys acquisition of the small company often take place (Brealey et al., 2006). Increase market share and revenue: MA leading to an increased power of the new entity in the market. This helps in increasing market share. It also improves the investment opportunities of the firm; a bigger firm has an easier time raising capital.eg. Premier and Apollo tyres. According to Seth (1990, p.101), market power is The ability of a market participant or group of participants to control the price, the quantity or the nature of products sold, thereby generating extra-normal profits. According to Zheer Souder (2004) ,increased market power and increased revenue growth are the most common objectives for the firms participating in MA.They can be achieved through horizontal MA.Andrade et al.(2001) stated market power may be increased by forming monopolies or oligopolies. Increased power results in being more competitive in the market and increased the revenue growth is achieved by taking the highly elastic products and lowering their prices. New growth opportunities come from the creation of new technologies, products and markets (Sudarsanam, 2003).Thus, these results in strengthening the financial position resulting in an increase in the profitability of the firm along with shareholders wealth. Increase supply chain pricing power: If a company buys its supplier it helps in reducing the cost of the company to a large extent which is due to the profits of the suppliers being absorbed, increases efficiency only producing products required (Just in time process). This is known as a vertical merger and leads to company buying products from the distributors at a lower price. Eliminate competition: Mergers and acquisitions eliminate the competition and increases firms market share. A drawback is that shareholders need to be paid a huge amount of premium to convince the other company to accept the offer. It is very common that the acquiring companys shareholders sell their shares which leads to reducing the price the company pays for the target company. Acquiring new technology: A large company can buy a small company with unique technologies and develop a competitive edge. This is the need of the competitive market. Procurement of production facilities: This is one of the reasons of mergers and acquisitions. Its a backward integration. When the acquiring firm take the decision of merging with a firm that supplies raw material which helps in safe guarding the sources that supply the goods or the primary products. It helps in reducing the transportation cost and economies in purchase of goods. Example: Videocon takes over Thomson picture in China. Market expansion strategy: Mergers and Acquisitions eliminate the competition and protect the existing market. The firm gets a new market to promote its products i.e. existing or obsolete. Example: to increase market in India Lenovo takes over IBM. Financial synergy: It may be the reason for a merger or an acquisition; following are the reasons for a financial synergy: Better credit worthiness : It helps the company to purchase goods on credit, raise capital in the market or obtain bank loan easily. Reduces cost of capital: The cost of capital reduces after mergers because the big firms are safe and they expect lower rate of return on capital. Increase debt capacity: Since a merger result in the rise in earnings and cash flows, this leads to increase in the capacity of the firm to borrow funds i.e. debts. Rising of capital: Better reputation and credit worthiness with the increase in the size of the company helps in raising the capital easily at any time. Taxes: The profitable companies generally buy the companies which are loss making, so that it reduces their tax liabilities. In United States they limit the profitable companies to buy the companies in loss. Example: Ahmedabad cotton mills merged with Arvind mills, Sidapher mills merged with Reliance industry. 2.2. THE EFFECTS OF MOTIVES ON MERGERS AND ACQUISITIONS After studying the various motives of Mergers and Acquisitions, now I further study the effect of the motives on Mergers and Acquisitions, i.e. the post-Merger and Acquisition. According to Burner (2002), there are four approaches (i.e. accounting studies, event studies, survey of executives and clinical studies) to measure post MA performance. Accounting and event studies are quantitative approaches and survey of executives and clinical studies are qualitative approaches. 2.2.1. EMPERICAL EVIDENCE BASED ON ACCOUNTING STUDIES Accounting studies is one of the methods used to examine the changes in the financial performance of the companies before and after a merger or an acquisition. More specifically, the changes of net income, profit margin, growth rates, return on equity (ROE), and return on asset (ROA) and liquidity of the firm are the focus of accounting studies (Bruner 2002; Pilloff, 1996). Dickerson et al. (1997) are the first researchers to study the relationship between MA and the profitability for the UK firms (1948-1977).According to their findings there is no evidence available to prove that MA brought any benefits to the financial performance of firms based on the measurement of profitability. Conversely the growth rate and the profitability was lower after the MA than before MA.Also, after controlling some uncertain factors that might affect profitability, Dickerson et al.(1997) found that MA had a negative effect on the acquirers profitability by measuring return on assets (ROA) in both the short term and long term period. This is consistent with Meeks (1977), whose studies indicated that the ROA for firms decreased after MA in the UK.However Dickerson et al did not investigate the nature of the acquired firm i.e. whether it is horizontal, vertical or conglomerate. Firth (1980), after studying the various other researchers results, concluded that based on accou nting studies, generally speaking, acquired companies dont have great profitability and have low stock market ratings before MA, but obtain a great deal of profit after engaging in MA.In contrast, acquiring companies generally have average or above average profitability prior to MA, whereas they suffer a reduction in profitability after MA. Ghosh (1997) is the first researcher to examine the correlation between post-merger operating cash flow and the method of payment used in MA for the acquiring company for 315 mergers over the period from 1985 to 1995.His research showed that the acquiring firm paid with cash and then it was compared with the company in the same industry, the cash flow increased significantly with an improved asset turnover after the MA. 2.2.2. EMPERICAL EVIDENCE BASED ON EVENT STUDIES: According to Bodie, et al. (2005, p381), an event study Describes a technique of empirical financial research that enables an observer to assess the impact of a particular event on a firms stock price. For example study of share and dividend changes. The standard event study includes the use of Sharpes (1963) market model and capital asset pricing model (CAPM) (Dimson Marsh, 1986).Based on event studies , Firth (1980) studied 496 targets and 434 acquirers in the during the period from 1969-1975and the result stated a conflict in terms of shareholders returns to acquiring firms. He found that in the UK after the takeover the share price and the profitability of an acquiring firm declines.Langeteig (1978) used a three factor performance index to measure long term stockholders gains from MA.He concluded that post-merger the excess returns were insignificantly different from zero and provided no support for mergers. The acquired and the bidder had an average excess return of 12.9% and 6. 11% respectively. 2.2.3. EMPERICAL EVIDENCE BASED ON CLINICAL STUDIES: It provides a blueprint for comparing the discounted value of cash flows and divestiture to the pre-acquisition value. They originate from anthropology, sociology and clinical methods in the 1920s.It is also called a case study, which is an in- depth study by one person through field interviews with executives and knowledgeable observers and is a form of quantitative descriptive research (Bruner, 2002). 2.2.4. EMPERICAL EVIDENCE BASED ON SURVEYS OF EXECUTIVES STUDIES: The surveys of executives in the form of a questionnaire, asking questions regarding motives of MA or whether they are beneficial for shareholders or not. The post-merger performance can be inferred from the questionnaire (Bruner, 2002).As in CFERF( Canadian financial executive research foundation) executive research report, Finance executives have shown in this study that organizations can improve their chances of successfully merging firms by incorporating people related risks into the evaluation, due diligence and deal structuring phases of MA activity. In Ingham et al. (1992), where they surveyed 146 of UKs top 500 companies during the period from 1984-1988 on the basis of a questionnaire. However in case of the profitability of acquiring firms, whether it increased or not post MA, they found different results. From the short term point (0-3years), 77% of the managers claimed that short term profitability increased whereas long term i.e. over 3 years, 68% said the profitability i ncreased. There is one problem in this survey, which is that it considers only private companies other than the other financing companies. TABLE 1. COMPARISON AMONG EACH RESEARCH REPORT STRENGTHS WEAKNESSES EVENT STUDIES It is a direct forward looking measure creating value for investors, where the expected future cash flow is the present stock price. There are various assumptions made regarding the functioning of the market, rationality, absence of restriction on arbitrage which is not unreasonable for most of the stocks on an average over time as a result of the researches. Some companies are vulnerable to specific events, researchers and large numbers of people deal with this problem. ACCOUNTING STUDIES It is the certified and audited accounts which are used by investors as an indirect measure of economic value creation. Different reporting practices. Different time period Principles and regulations different for different companies. In case of historic cost approach, inflation and deflation is a sensitive issue. Inadequate disclosure of the accounts by the companies. Different accounting practices in different countries. SURVEY OF MANAGERS It gives an insight of the success of the acquisition that may not be known in the stock market. Includes the study of managers whose area of interest is not focused on the creation of economic value. Historical results are not good predictors Participation is very low i.e. 2-10% which makes them vulnerable to criticisms. CASE STUDIES Inductive research to examine new patterns and behaviour by restructuring an actual experience. The research reports can be difficult to abstract large implications from numerous reports where hypothesis testing limits the researches ability to increase the size of the research Source: Does M A Pay? A survey of evidence for the decision maker (Bruner, 2002, p.16). CHAPTER 3: RESEARCH METHODOLOGY 3.1. OVERVIEW OF AN ACCOUNTING STUDY RESEARCH METHODOLOGY A company taking over other company will need to evaluate the company to determine whether it is beneficial or not. The main idea is to find the worth of the company; both the companies will have different ideas to evaluate the merger. Naturally, the seller would value the company at the highest price as possible, whereas the buyer will value it at the lowest price possible. The companys operations need to be valued by taking some of the accounting procedures into account; it also helps in knowing the impact of mergers and acquisitions on the cost, revenues, profits etc. of both the companies. Firstly, I will consider the companys financial statements, balance sheet, profit and loss accounts and the content in the annual reports. Using this data I will calculate the financial ratios i.e. profitability ratios (net profit margin, gross profit margin, return on asset and return on equity), liquidity ratios (current ratio and liquid ratio) and activity ratios (total asset turnover and inventory turnover).These financial ratios help in analysing the companys performance and various other factors indicating the progress. There are many appropriate ways to value the company, it can be by either comparing two companies in the same industry or there are some more ways of valuing the companies which are discussed as follows: 1. Profitability Ratios: It is to measure the overall performance of the company; the success of a company and the goal is to obtain sufficient profit in the end. It is used for the analysis of the trend, the operating profitability and efficiency is observed by the gross profit margin ratio and also the return on assets and equity analyses the managers efficiency in manufacturing and purchasing costs, it also reflects the perspective of the shareholders. It also helps in knowing the return on sales using the figures of net profit margin, this is used for two companies in the same industry in different years, also tells the profit earned in respect to the sales. 2. Liquidity Ratios: It consists of current ratio and liquidity ratio. These ratios measure the liquidity of the firm i.e. how they meet their creditors demands. Liquidity arises when the cash inflow is not the same as cash outflow. Example: If cash inflow from sale is unequal to the cash paid to the employees or suppliers etc. then the problem of liquidity arises. Also, in calculation of quick ratio, inventory is not included as it is the least liquid current asset. 3. Activity Ratios: It measures the efficiency of the company to use the assets. Total asset turnover ratio helps understanding how efficiently different companies use its assets whether in the same industry or taking into account two different years. The inventory turnover ratio tells how efficient the working capital management is as it indicates both liquidity and operational efficiency. Secondly, since the absolute ratios dont have any meanings the major point is to observe the changes in the ratio from one country to another or comparisons among various companies. Lastly, the profitability of the company is affected by various factors like firm-specific, industry-specific and economic-wide factors. The profitability change of the acquiring company and the benchmark group i.e. the post-merger and long term data is available to the acquirers as the target companies are de-listed after the MA (Sudarsanam, 1995). In the dissertation, I take the benchmark groups as the top two competitors of the company. It involves calculating the financial ratios and analysing them, this is one of the easiest tools to compare two companies, also during the observation period the benchmark group is not acquired or made large. Formulas of key financial ratios Key growth rates Turnover Changes in turnover Net profit Profitability ratios Net profit margin= net profit after tax/sales Gross profit margin = gross profit /sales Return on Asset (ROA) = net profit before interest /sales Return on equity (ROE) = net profit after tax/equity Liquidity ratios Current ratio = current assets/current liabilities Quick ratio = (current assets-inventories)/current liabilities Activity ratios Total asset turnover = sales / total assets Inventory turnover = cost of sales / inventories SOURCE OF DATA: The data i.e. the financial reports of the companies including the balance sheet, profit and loss account and the cash flow statement is compiled from the reports available online on the companys website. These statements are used to know the financial performance of the company before and after a merger or an acquisition. LIMITATIONS OF THE STUDY: Since the data is collected from the secondary sources i.e. the financial reports of the companies so it is possible that they are bias because of the accounting techniques. Also, there can be some limitations related to the some aspects of financial reports not being analysed properly despite of studying and analysing all the key ratios. The results of other studies like clinical study, survey study, event study when compared to the accounting studies results have different conclusions about the effect of MA.For example: while studying a clinical study, one of the factors that could affect the changes in production and performance can be organizations managerial and mechanism practices (kalpan, et al., 1997) which is not a factor that is examined in accounting studies. CHAPTER 4 CASE STUDY ANALYSIS 4.1. Overview of ATT acquisition of BellSouth Corporation BellSouth was acquired by ATT on 29th December 2006 with an aim to control more than half of the telephone and the internet services in the U.S.It was approved by Federal Communications System (FCC), and was worth $ 86 billion approximately (or 1.325 shares of ATT for each share of BellSouth on the close of trading date).This resulted in ATT being the nations largest provider of business voice, data /internet and wireless services. Thus, it leads to own both yellowpages.com and Cingular wireless, leading to the expansion of the telephone and the data network all over the country covering 22 states. 4.1.3. The motives of ATT acquisition of BellSouth ATT provides smartphones, next-generation TV services and also sophisticated solutions for multi-national businesses. It aims at providing innovative, reliable, high quality products and services prioritising the customers satisfaction and bringing them together even if they are at different parts of the world. It achieves its aim by using innovative ideas in the communications and entertainment industry. It fulfils the growth motive as it lead to providing the nations fastest mobile broadband network, providing large coverage for U.S. wireless carrier and also the largest Wi-Fi network in United States.Also,its the only 100 per cent IP-based national U.S. television service provider. It has a three-screen strategy that provides services across the mobile device, TV and the PC.More than 1200 ATT real yellow pages are published and distributed annually. It also fulfils the motive of diversification as it was ranked No.4 on the DiversityInc top 50 lists in 2011 for its diversity and inclusion initiatives and it was also ranked as no.2 for suppliers diversity in the same year. It is also No.1 among 75 American companies which were awarded for exceptional learning and development programs. It was also awarded various awards for recognising women talents in different fields. Also, was recognised for its exemplary achievements as the corporation of the year including Asian, Black, Hispanic and native American-owned provider in its supply chain. It was also awarded for its emphasis in managing its technology. 4.1.4. Consequences of ATT acquisition of BellSouth: Financial Performance Figure 1: Key figures and ratios of BellSouth from 2004-2005 (in $ millions) 2004 2005 Sales 20,300 20,547 PBIT 5,289 4,670 Changes in sale 247 PAT 4,758 3,294 Gross Profit 12,780 12,480 Equity 23,066 23,534 Total Asset 59,339 56,553 Retained Earnings 19,267 20,383 Gross profit Margin 0.629 0.607 ROE 0.206 0.1399 ROA 0.0873 0.07607 Total asset turnover 0.342 0.363 Current Asset 5,613 4,209 Current Liability 10,370 11,286 Current Ratio 0.54 0.37 Analysis: The key indicators of the growth rate are sales, net profit and the changes in the turnover. As in the figure 1 the sales increase from the year 2004 to 2005 by $247 million but there is a decrease in the profits of the company where profit before interest and tax and profit after tax both decrease by $619 million and $1465 million respectively. The profitability can be studied by looking at the gross profit margin, ROE (Return on equity) and ROA (Return on asset), all the figures are decreasing from the year 2004 to 2005, thus showing that the company suffers losses. This ratio indicates the effect of changes in sales, equity and assets on the gross profit, PBIT and PAT respectively. According to Walton Aerts (2006), the margin ratios are used to study the trend analysis and to do comparisons among companies and also helps in studying the operating profitability and efficiency. Hence the figure shows inefficient operating profitability and efficiency. The liquidity ratio i.e. the current ratio studies how a company meets its creditors demands. There is a decrease in the current ratio from 0.54 to 0.37 .the ideal current ratio is 2:1, thus by a decrease in this ratio we observe that the company is unable to meet its short term debt i.e. the demand of the creditors which is due to the decrease in the current asset and an increase in the current liability from the year 2004 to 2005. The activity ratio which is the total asset turnover ratio is increasing from 0.342 to 0.363, thus showing that the companys assets are used efficiently by the management. To summarize, BellSouth didnt perform good financially before the merger. Figure 2: Key figures and ratios of ATT from 2004-2007 (in $ millions) 2004 2005 2006 2007 Sales 40,733 43,764 63,055 1,18,928 PAT 5,887 4,786 7,356 11,951 PBIT 5,901 6,168 10,288 20,404 Changes in sale (1,101) 2,570 55,273 Gross Profit 23,372 24,755 35,706 72,873 Equity 40,504 54,690 1,15,540 1,15,367 Total Asset 1,10,265 1,45,632 2,70,634 2,75,644 Retained Earnings 28,806 29,106 30,375 33,297 Gross profit Margin 0.57 0.565 0.566 0.613 ROE 0.145 0.087 0.206 0.103 ROA 0.0535 0.0423 0.038 0.074 Total asset turnover 0.369 0.301 0.233 0.431 Current Asset 9,962 14,654 25,553 24,686 Current Liability 20,355 25,418 40,482 39,274 Current Ratio 0.4894 0.577 0.631 0.629 Quick Ratio 0.613 0.60 Inventory 756 1,119 Analysis: The key indicators of growth rate are sales, change in inventory and the net profit. Looking at the figure 2, it can be seen that sales increase steadily from 2004 to 2005 which is a remarkable increase from 2005 to 2006 i.e. after the acquisition and then leading to a major increase of 87.66% .Also the profit and the changes in inventory increase remarkably indicating that it was beneficial for the firm to acquire BellSouth. The gross profit margin, ROE and ROA figures from the above table indicate that the increasing trend of the gross profit margin shows an improvement in the operating efficiency over the years. The ROE tells the benefit to the shareholders it had an increasing trend from 2004 to 2005 with a great hike in the year 2006,but further lead to a decrease in 2007 from 0.206 to 0.103 ,thus showing a slight decrease in the profitability. The ROA shows a significant increase over the years thus showing that the company managed its assets quite well. The liquidity ratio, the current ratio and the quick ratio measures the companys ability to meet its creditors demands. The figures in the above table indicate that the company is able to meet its creditors demands sufficiently with an increase in it over the years. The activity ratio, i.e. the total asset turnover ratio indicates how well the assets are managed, thus the figures indicate a good management of assets over the year 2004 to 2007. Thus, the figure 1 and figure 2 show an improvement in the profitability, efficiency and managing skills of the companies over the years. 4.1.5. Comparison of ATT with its competitor post acquisition: Verizon Verizon Communications Inc., known as Verizon provides a global broadband and telecommunication service. It originated in 1983 as Bell Atlantic in New York City. In 2000, after acquiring the independent phone company GTE it continued to run by the name of Verizon. It is one of the top competitors to ATT in the telecommunication industry. Figure 3a. Key growth of Verizon from 2006-2009 Year Turnover ($ million) Net Profit ($ million) Gross Profit PBIT 2006 88,182 6,197 52,873 8,154 2007 93,469 10,358 55,922 14,545 2008 97,354 12,583 58,347 15,914 2009 1,07,808 10,358 63,509 11,568 Source: Compiled from Verizons annual reports from 2006-2009 Figure 3b. Key growth of ATT from 2006-2009 Year Turnover ($ million) Net Profit ($ million) Gross Profit PBIT 2006 63,055 7,356 72,873 10,288 2007 1,18,928 11,951 72,127 20,404 2008 1,24,028 12,867 74,472 23,063 2009 1,23,018 12,535 72,613 21,492 Source: Compiled from ATTs annual reports from 2006-2009 The data of the key growth of Verizon (Fig.3a) shows an increasing turnover from the year 2006 to 2009 from $88,182 million to $1,07,808million.In the case of ATT (Fig.3b) shows that the key indicator of growth the turnover of the company is steadily increasing from the year 2006 to 2008 with an insignificant fall in the year from $1,24,028 million in 2008 to $12,30,18 million in 2009.Both the companies show a consistent increase in the revenue over the years where the revenue growth of Verizon is 22.25% and of ATT is 95.096 % respectively. Thus, ATT has better growth rate over the six years; hence it achieves the revenue synergy. With regard to the net profit , both Verizon and ATT have increasing net profits over the four years, where the net profit of both the companies decrease insignificantly in the year 2009 from 2008 ,with ATT having more profit than Verizon. Therefore, ATT maintains a steady net profit over the years. Figure 4a.Profitability Ratios of Verizon from 2006-2009 Year Net profit Margin Gross profit margin Total Assets Equity ROA ROE 2006 0.070 0.599 1,88,804 48,535 0.043 0.128 2007 0.1108 0.598 1,86,959 50,581 0.288 0.204 2008 0.129 0.599 2,02,352 78,905 0.202 0.159 2009 0.096 0.589 2,27,251 84,367 0.137 0.123 Source: Compiled from Verizon annual reports from 2006-2009 Figure 4b. Profitability Ratios of ATT from 2006-2009 Year Net Profit Margin Gross Profit margin Total Assets Equity ROA ROE 2006 0.116 1.156 2,70,634 1,15,926 0.038 0.0635 2007 0.1005 0.606 2,75,644 1,15,747 0.074 0.1032 2008 0.104 0.600 2,65,245 96,750 0.087 0.1329 2009 0.102 0.590 2,68,752 1,02,325 0.079 0.1225 Source: Compiled from ATT annual reports from 2006-2009 Comparing the net profit margin and the gross profit margin of the two companies over the four years, the average net profit margin of Verizon and ATT is 0.101 and 0.106 respectively and the average gross profit margin is 0.596 and 0.738 respectively. Thus showing that companies make profits on the total assets and shareholders equity possessed. Thus, ATT has a better market strategy than Verizon. At the same time the ROA and the ROE of the two companies were positive with an increasing trend. Though the average ROA is 0.167 and 0.0695 respectively showing the return on asset of ATT is not as good as that of Verizon. The financial position of ATT Company has a positive indication but the financial status after the acquisition is poor as that of the competitor company. Figure 5a.Liquidity Ratios of Verizon from 2006-2009 Year Current asset Current liability Inventories Current Ratio Quick Ratio 2006 22,538 32,280 1,514 0.698 0.65 2007 18,698 24,741 1,729 0.756 0.686 2008 26,075 25,906 2,092 1.007 0.926 2009 22,608 29,136 2,289 0.776 0.697 Source: compiled from Annual reports of Verizon from 2006-2009 Figure 5b. Liquidity Ratios of ATT from 2006-2009 Year Current asset Current liability Inventories Current ratio Quick ratio 2006 2,553 40,482 756 0.063 0.044 2007 24,686 39,274 1,119 0.629 0.601 2008 22,556 42,290 862 0.533 0.513 2009 24,334 36,705 885 0.663 0.639 Source: compiled from Annual reports of ATT from 2006-2009 From the prospective of the Liquidity, the current ratio and the quick ratio followed an increasing trend for both Verizon and ATT from 2006-2009 , where the average current ratio of the respective companies is 0.81 and 0.472 respectively and the average quick ratio being 0.74 and 0.45 respectively. From the year 2006-2009, the current assets of Verizon is the almost the same of the year 2006 and 2009, whereas the current liability has decreased. In case of ATT, his current assets increased majorly in 2007 leading to a steady increase till the year 2009 whereas the current liabilities have decreased by 9.33% over the four years. As the average ratios of Verizon are better than that of ATT, the short term liquidity of the company was worse than its competitor after the acquisition. Figure 6a.Activity Ratios of Verizon from 2006-2009 Year Total Asset Turnover 2006 0.467 2007 0.499 2008 0.481 2009 0.474 Figure 6b. Activity Ratios of ATT from 2006-2009 Year Total Asset Turnover 2006 0.233 2007 0.431 2008 0.367 2009 0.401 From the above figures 6a and 6b, it is observed that the total asset turnover ratio of both the companies Verizon and ATT are steadily increasing with an average total asset turnover to be 0.48 and 0.35 respectively.However the average of ATT was lower than that of Verizon thus proving that ATT did not utilize its total assets efficiently after the acquisition. Summary According to the Verizons annual report, there is a good operating and financial discipline seen in the business, with maximising the cash flow and the return to the shareowners. Also, by the end of this year there is an extraordinary growth seen by introducing video sharing, conferencing and 4G connections. According to the ATT annual report, the company did improve increasing the efficiencies over the board, adjusting cost structure, increasing cash flow and raising dividends as compared to the last year. By comparing the various financial performance indicators of ATT with its competitor Verizon, it has been concluded that ATT did not show a commendable performance after the acquisition. It has a consistent revenue growth, net profit margin and gross profit margin, but it underperformed its competitor in ROE, ROA, liquidity ratios and total asset turnover. Thus proving the results of Dickerson et al. (1997), Meeks (1977), Firth (1980) and Caves (1989) to be consistent as in the empirical literature review claiming that the profitability of the acquiring company is lower after the MA than before the MA. 4.2. T-MOBILE AND ORANGE MOBILE MEGER AN OVERVIEW In December 2009, Consumer Focus and the Communications Consumer Panel had sent a joint letter to the Competition Commissioner, Neelie Kroes asking for the merger by the authorities in the UK.On 1st March 2010, the European Commission approved the merger with a condition that the combined company sells the 25% of the spectrum it owns on the 1800 MHz radio band and amend a network sharing agreement with smaller rival. In 2010, Deutsche Telekoms T mobile and Orange mobile combined together by becoming a part of the joint venture with France Telecoms UK mobile network provider. They merged under the new parent company called Everything Elsewhere on 11th may 2010, which was announced on the British High Streets. Despite the merger they continued to co-exist in the UK market. This took place on the 1st April 2010.On 8th September 2009 the BBC news stated that It would be UKs largest provider overtaking the Telefonicas O2, with about 37% of the mobile market. According to the financial times The mobile phone operator formed by the merger of Orange and T-Mobile two years ago has been forced to sell the spectrum by European competition authorities. It covers around 30million customers, i.e. more than half of the UKs adult population. The CEO of the company Tom Alexander said that This is the first major consumer benefit of the merger between Orange and T-Mobile, and it delivers an unrivalled and unique experience that no other operator can offer. 4.2.3. The motives of T-Mobile and Orange Mobile merger The main aim behind the merger was to create the countrys largest mobile phone operator covering 37% of the market, leapfrogging rivals Vodafone and O2.This deal lead to unemployment as the two companies rationalised their networks. Also, it helped in cost saving by closing down the high street retail stores worth 3.5bn. France Telecoms chief financial officer Gervais Pellissier said the deal would on the one hand fundamentally change our respective positions in the UK and on the other hand bring substantial benefits to consumers in the UK. His opposite number at Deutsche Telekom, Timotheus Httges, added that the merger was the first step towards creating the new mobile champion in the UK. On August 21, 2012, according to the financial times, 4G mobile broadband will reach Britain the next month and also the company aims at providing 4G mobile and phones broadband devices in UK by the next year The deal helped the T-Mobile to be at par with its competitors and helps Orange to improve its margins by pooling its wireless assets with T-Mobile. Prior to