An evaluation of the proposed merger between two Internet music industry competitors.
Introduction
Mergers and acquisitions can take place for a variety of reasons: a company may seek to eliminate competition by purchasing a competitor; investors may want to sell the assets of the acquired company; a merger may give both companies access to technology and entry into other markets they would not otherwise gain. In the case of CDnow and N2K, the proposed merger is an attempt to bring together two Internet competitors for the purpose of strengthening the position of both in the Internet marketplace. This research examines the proposed merger as outlined in the prospectus, and considers the actions that the two companies should take.
Mergers and acquisitions can take place for a variety of reasons: a company may seek to eliminate competition by purchasing a competitor; investors may want to sell the assets of the acquired company; a merger may give both companies access to technology and entry into other markets they would not otherwise gain. In the case of CDnow and N2K, the proposed merger is an attempt to bring together two Internet competitors for the purpose of strengthening the position of both in the Internet marketplace. This research examines the proposed merger as outlined in the prospectus, and considers the actions that the two companies should take.
CDnow Background
Founded in 1994, CDnow is an online store which sells compact discs (CDs) and…