Read the article Biggest M&A Deals of 2021 to identify a company that has recently diversified through mergers or acquisitions (or a combination of both).
https://dealroom.net/blog/notable-mergers-and-acquisitions-deals
Respond to the following Questions On a Word Doc. Please list the question and put the response under it.
1: Based upon the information presented by the textbook authors in Chapter 6, discuss your view of the likelihood of the success of the diversification, citing
specific information in the textbook that backs your perspective.
2: Why do some diversification efforts pay off while others produce poor results?
3: Dess et al. (2021) say, “Diversification initiatives—whether through mergers and acquisitions, strategic alliances and joint ventures, or internal development
—must be justified by the creation of value for shareholders?” (p. 175). What should that value be? And what happens if diversification initiatives do not
create that value?

Sample Solution

Some diversification efforts pay off because they help reduce risk by spreading investments across multiple asset classes, sectors and countries. This reduces the impact of short-term market volatility on a portfolio. Furthermore, when selecting assets for diversification, it is important to look for investments that have low correlations with one another so that performance in one area does not drag down performance in another. On the other hand, poor results can occur when investors fail to properly evaluate the risks associated with each investment or fail to select assets with low correlations. In addition, excessive diversification can lead to underperformance as too much time and resources are spent managing a wide array of investments instead of focusing on those with higher potential returns.

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