Merger of companies: essence, goals of the process
Posted: Sun Dec 22, 2024 10:15 am
What are we talking about? A merger of companies is a common form of business reorganization. It is the purchase of a controlling stake in a smaller organization for the purpose of expansion, monopolization of the market, obtaining patents, technologies, resources.
How does it happen? It can happen in a friendly or unfriendly form, horizontally, vertically, mixed. The merger is carried out in several stages, controlled by government agencies.
The article explains:
What does mergers and acquisitions mean?
Objectives of mergers and acquisitions of companies
Advantages and Disadvantages of Mergers
Friendly and hostile mergers mexico number for whatsapp and acquisitions of companies
Types of company mergers
Stages of company merger
Benefits for investors in mergers
Examples of mergers and acquisitions in Russia and around the world
Frequently Asked Questions About Mergers
In-Depth Guide: How to Cut Your Ad Costs by 25% with Artificial Intelligence
Download for free
What does mergers and acquisitions mean?
Every modern enterprise strives to develop and increase profits. To achieve this goal, various strategies are used, including two main approaches:
creation and development of a business on your own;
acquisition of another company or merger with it (M&A).
M&A (Mergers & Acquisitions) includes two main types of transactions: mergers and acquisitions.
In a takeover, one company acquires a controlling stake (at least 30%) in another organization, giving it the ability to manage the latter. The acquired company remains operational as long as it has other shareholders. However, it loses the ability to influence the decision-making of the acquiring company's management.
What does mergers and acquisitions mean?
Source: shutterstock.com
A merger of companies is the formation of a new economic entity through the unification of all types of resources (including human, material and intellectual) of two or more organizations.
Unlike the first type of transaction, a merger is a rather complex process. It is important for the merging companies to understand what functions will be distributed between them and how this will lead to additional benefits. The concept is that the combined capitals of the enterprises can provide a higher level of profitability than each of the organizations separately (1 + 1 = 3).
There are several strategies within M&A:
Buying a competitor: This tactic involves acquiring a competing company for the purpose of synergy, developing the acquired organization based on its own experience, and economies of scale.
Absorption of your business chain. In this case, various links of your own business are combined in order to achieve synergy, savings by combining costs and using the experience of both companies.
Portfolio strategy. A portfolio of companies is created for the purpose of diversification, as well as obtaining financial and operational support.
An example of a merger between two companies is the merger of Daimler (Mercedes Benz) and Chrysler. The companies combined production capacities and technologies, while maintaining the sales and profit-generating processes used in each company.
The deal failed because of differences in the corporate cultures and business approaches of the organizations. Daimler always attached great importance to minimizing errors. Decisions were made exclusively by top management. At Chrysler, the main principle was the equality of each employee. Decisions were made collectively. Experiments were encouraged.
The development strategy was never implemented. From this example of a merger, we can conclude that identifying the people responsible for each process is a key factor in the success of a merger.
If you choose the right M&A strategy, you can increase financial performance, reduce risks and find a way out of a difficult situation.
How does it happen? It can happen in a friendly or unfriendly form, horizontally, vertically, mixed. The merger is carried out in several stages, controlled by government agencies.
The article explains:
What does mergers and acquisitions mean?
Objectives of mergers and acquisitions of companies
Advantages and Disadvantages of Mergers
Friendly and hostile mergers mexico number for whatsapp and acquisitions of companies
Types of company mergers
Stages of company merger
Benefits for investors in mergers
Examples of mergers and acquisitions in Russia and around the world
Frequently Asked Questions About Mergers
In-Depth Guide: How to Cut Your Ad Costs by 25% with Artificial Intelligence
Download for free
What does mergers and acquisitions mean?
Every modern enterprise strives to develop and increase profits. To achieve this goal, various strategies are used, including two main approaches:
creation and development of a business on your own;
acquisition of another company or merger with it (M&A).
M&A (Mergers & Acquisitions) includes two main types of transactions: mergers and acquisitions.
In a takeover, one company acquires a controlling stake (at least 30%) in another organization, giving it the ability to manage the latter. The acquired company remains operational as long as it has other shareholders. However, it loses the ability to influence the decision-making of the acquiring company's management.
What does mergers and acquisitions mean?
Source: shutterstock.com
A merger of companies is the formation of a new economic entity through the unification of all types of resources (including human, material and intellectual) of two or more organizations.
Unlike the first type of transaction, a merger is a rather complex process. It is important for the merging companies to understand what functions will be distributed between them and how this will lead to additional benefits. The concept is that the combined capitals of the enterprises can provide a higher level of profitability than each of the organizations separately (1 + 1 = 3).
There are several strategies within M&A:
Buying a competitor: This tactic involves acquiring a competing company for the purpose of synergy, developing the acquired organization based on its own experience, and economies of scale.
Absorption of your business chain. In this case, various links of your own business are combined in order to achieve synergy, savings by combining costs and using the experience of both companies.
Portfolio strategy. A portfolio of companies is created for the purpose of diversification, as well as obtaining financial and operational support.
An example of a merger between two companies is the merger of Daimler (Mercedes Benz) and Chrysler. The companies combined production capacities and technologies, while maintaining the sales and profit-generating processes used in each company.
The deal failed because of differences in the corporate cultures and business approaches of the organizations. Daimler always attached great importance to minimizing errors. Decisions were made exclusively by top management. At Chrysler, the main principle was the equality of each employee. Decisions were made collectively. Experiments were encouraged.
The development strategy was never implemented. From this example of a merger, we can conclude that identifying the people responsible for each process is a key factor in the success of a merger.
If you choose the right M&A strategy, you can increase financial performance, reduce risks and find a way out of a difficult situation.