Mergers & acquisitions explained

The FijiSun today explain Mergers & Acquisitions and how the two differ from each other. They go on to list the most common types of deals – from vertical and horizontal to conglomerate mergers …and the reasoning and motivation behind them.

The purpose of a merger is usually to create a bigger entity, which accelerates growth and leads to economies of scale…

There are various reasons as to why a company might decide to merge or acquire another company, although there is a strategic reasoning behind the merger. Mergers and acquisitions usually create value for the company in different ways, some of which are listed below… read more.

Other scenarios not covered by this article are defensive mergers, accretive, add-on and bolt-on acquisitions and others.

Wikipedia describes Mergers and acquisitions (as) transactions in which the ownership of companies, other business organizations or their operating units are transferred or combined. As an aspect of strategic management, M&A can allow enterprises to grow, shrink, change the nature of their business or improve their competitive position.