Response to discussion

Please respond to this discussion comments, of one of the classmates, in one paragraph (50 words). It is about Mergers and Acquisition (Project 3).

There are many considerations firms need to consider before acquiring a company, from brand impact to financials to the company's history, it is important for potential buyers to do their research. When looking at just financials, Marriott International would be the more attractive to a large equity firm. Looking at both company's financials, Marriott is the stronger company. Net income for Choice Hotels is -17.56% from 2016 to 2017 while Marriott's is 75.90% from 2016 to 2017. Revenues are also much stronger for Marriot with 34.10% from 2016 to 2017 while Choice is 8.95% for the same time period. Choice also has a higher debt and more liabilities than Marriott which is a negative for investors.

There are many people affected when two companies merge. From the employees to the customers to the investors, every stakeholder will be impacted in some way. Acquisitions can have a range of impact on investors. Often times, it makes current investors or stakeholders nervous because there are a lot of unknowns and people are resistant to change. However, generally being acquired is a positive sign as your company is attractive enough in some way for another company to invest enough money in to purchase. For investors, this can mean more money directly to them or a stronger investment opportunity with a bigger, stronger company that is the newly merged company. This will generally result in a positive reaction from investors because they involved in a stronger, bigger company that may have more potential than the current company they're invested in (Zhu, 2011).