Practice English Vocabulary Exercises – Vocabulary for Banking and Finance: Mergers and acquisitions

A. Choose the best word from each pair in underline type.

1   Anderson Accounting has been taken over / taken up by Berlin Brothers.

2   Collins Corporation has made a bid / play for Dacher Deutsche

3   The board of Dacher Deutsche rejected / denied Collins Corporation’s offer.

4   Eastern Electricity has joined / merged with Grampian Gas

5   Inter-tek has been sold by its father / parent company, Harrison Holdings.

6   Inter-tek has been acquired / got by Johnson & Johnson

7   Harrison Holdings is expected to sell more of its subsidiaries / children in the future.

B. Put the words below into the correct spaces.

conditional bid          controlling interest          hostile takeover

merger          “poison pill”          shareholders

target company          unconditional bid          “white knight”

Takeover bids

In a takeover bid, another person or business makes an offer to the ¹…………………….. to buy their shares at a fixed price. The aim of this is to take control of the ²……………………..

If it is a welcome takeover bid, the directors of the company advise the shareholders to accept the offer. If the shareholders accept the offer, the result is usually called a ³……………………..

If the bid is unwelcome, the directors advise the shareholders against accepting it. The bidders may then write to the shareholders explaining the advantages of the takeover, and perhaps improving the offer for the shares. This is known as a ⁴…………………….. bid.

To avoid an unwelcome takeover bid, the directors may devise a ⁵…………………….. – a tactic that will mean the company is worth much less if the takeover bid is successful. Alternatively, they may look for a ⁶…………………….. – an alternative bidder for the company whose takeover would be more welcome.

In an ⁷…………………….., the bidder offers a price for each share regardless of how many shares it can buy. In a ⁸…………………….., the offer price depends on the bidder being able to buy enough shares to gain a ⁹…………………….. in the target company.

C. Choose the best word to go into the space.

1   Berlin Brothers bought a ……………………… shareholding in Anderson Accounting.

      a   more-than-half      

      b   biggest      

      c   majority

2   In the UK, mergers and acquisitions are not ……………………… by the government.

      a   controlled      

      b   checked      

      c   regulated

3   However, they are subject to a voluntary ………………………

      a   code of conduct      

      b   code of practice      

      c   way of doing things

4   Buying a company for less than the value of its assets, then selling those assets to make a profit is called ………………………

      a   asset stripping      

      b   profiteering      

      c   exploitation

5   Sometimes a controlling interest in a company is bought by its managers. This called a management ………………………

      a   buy-out      

      b   buy-up      

      c   buy-in

6   In the past, a lot of small banks were ……………………… by larger ones.

      a   bought up      

      b   eaten up      

      c   chewed up

7   In other words, there was ……………………… in the banking industry.

      a   amalgamation     

      b   combining      

      c   consolidation

8   A takeover of a foreign company is known as a ……………………… deal.

      a   cross-boundary      

      b   cross-border      

      c   cross-state

D. Match the words on the left with the words on the right.