M&As can bring a host of benefits for both the acquiring and the target companies, such as increased economies of scale and improved purchasing power, improved distribution capabilities and access to new materials and non-material resources, special corporate capabilities including risk diversification, geographic expansion and more.
The M&A could require a lot of time and effort, as well as a lot of money. In the end, the businesses involved could be forced to forfeit other opportunities. A merger or acquisition could also result in diseconomies for consumers since the market share of both companies could make them pay more for products and services.
An acquisition could be a hostile or friendly transaction. In hostile transactions companies will pay a premium to the owners of the company they want to acquire over what they believe the business is worth. The acquiring company then takes over the business, eliminating any potential competition and gaining a larger share of the market.
The acquiring company can also purchase the assets of a target firm leaving the target company with nothing other than cash (and maybe some debt, if there is any). In this type of deal the acquiring firm typically does not retain the employees of the company it has acquired. However, it may hire some of its employees and preserve the name of the acquired business.
آخرین دیدگاهها