CIMA F3 clearly states that acquisitions enhance shareholder wealth only if they create real economic value, not just strategic or reputational benefits.
A. Press coverage – ✘
Media exposure does not directly generate cash flows or economic value.
B. New opportunities for employees – ✘
While beneficial socially, this does not directly enhance shareholder wealth unless it improves profitability.
C. Cultural diversity – ✘
CIMA F3 treats this as a soft benefit with no guaranteed financial return.
D. Acquiring Intellectual Property – ✔
IP can generate monopoly power, licensing income, and sustainable competitive advantage, directly increasing future cash flows.
E. Exploiting production synergies – ✔
Cost savings and operational efficiencies are a primary source of acquisition value highlighted throughout the F3 syllabus.
F. Elimination of competition – ✔
Reduced competition can increase pricing power and market share, improving long-term profitability and shareholder value.
