QUESTION 2 Northern Supermarkets Plc are a supermarket chain based in the United Kingdom. The company are the 3rd largest supermarket chain in the country, and mostly operate in Scotland and the north of England. The company currently operate over 100 supermarkets and employ 2,500 staff in their stores and Head Office. Northern Supermarkets are known for their upmarket produce and have a loyal core of customers who are willing to pay for high quality produce and excellent service. The company has been struggling to keep their fresh fruit and vegetable shelves stocked recently due to the combination of the COVID-19 pandemic and post-Brexit trading restrictions. The frequent stockouts are now the most reported issue to their customer services team. The company are evaluating a number of options to create certainty for their business. The board are investigating the takeover of a food wholesaler Farm Produce Plc. Farm Produce own farms and food plantations around the world and have wholesale warehouses spread across the United Kingdom. If the transaction goes ahead, Northern Supermarkets expect a number of synergies to arise. REQUIRED: Q2.1 Outline what type of merger is listed above. (4%) Q2.2 Evaluate the motive and the potential source of the synergies that might arise as part of the transaction. (8%) Q2.3 Is it likely that this merger transaction will add value to Northern Supermarkets and Farm Produce shareholders? (In your answer, you should make reference to the event study evidence for both bidding and target firms, and you should outline why event studies are an appropriate technique to use here). (12%) Q2.4 Northern Supermarkets currently have a banking arm that provides savings accounts, current accounts and mortgage products. The company is considering whether to divest this segment of the business. Outlined the potential motivation(s) for the company to undertake this activity (9% %) (TOTAL 3374 %) QUESTION 2 Northern Supermarkets Plc are a supermarket chain based in the United Kingdom. The company are the 3rd largest supermarket chain in the country, and mostly operate in Scotland and the north of England. The company currently operate over 100 supermarkets and employ 2,500 staff in their stores and Head Office. Northern Supermarkets are known for their upmarket produce and have a loyal core of customers who are willing to pay for high quality produce and excellent service. The company has been struggling to keep their fresh fruit and vegetable shelves stocked recently due to the combination of the COVID-19 pandemic and post-Brexit trading restrictions. The frequent stockouts are now the most reported issue to their customer services team. The company are evaluating a number of options to create certainty for their business. The board are investigating the takeover of a food wholesaler Farm Produce Plc. Farm Produce own farms and food plantations around the world and have wholesale warehouses spread across the United Kingdom. If the transaction goes ahead, Northern Supermarkets expect a number of synergies to arise. REQUIRED: Q2.1 Outline what type of merger is listed above. (4%) Q2.2 Evaluate the motive and the potential source of the synergies that might arise as part of the transaction. (8%) Q2.3 Is it likely that this merger transaction will add value to Northern Supermarkets and Farm Produce shareholders? (In your answer, you should make reference to the event study evidence for both bidding and target firms, and you should outline why event studies are an appropriate technique to use here). (12%) Q2.4 Northern Supermarkets currently have a banking arm that provides savings accounts, current accounts and mortgage products. The company is considering whether to divest this segment of the business. Outlined the potential motivation(s) for the company to undertake this activity (9% %) (TOTAL 3374 %)