Mergers, Acquisitions And International Strategies Essay

1943 Words8 Pages
Mergers, Acquisitions and International Strategies

Companies use various strategies to gain access to new markets and increase their profitability. Among the strategies are mergers and acquisition, which enable a company to gain synergy, industry visibility as well as economies of scale. Acquisition involves a takeover of one company, the target by another company called the acquirer. The acquired company may cease to exist and the acquirer’s stock continues to be traded. Mergers, on the other hand, involve two companies which are of approximately the same size or resources agree to form a single new company instead of having separate ownerships. Moreover, CEOs may decide to join their companies together for the best interest of both firms to form a merger. However, mergers and acquisitions are dependent on their purchase style, such as hostile or friendly, and how both exercises are announced and received by the stakeholders.
Mergers and acquisitions are usually done to provide the parties with synergy for cost efficiencies through revenue enhancements. Further, they enable firms to benefit from staff reductions to cut costs and boost profitability, gain economies of scale to cut costs and improve the purchasing power. They also enable companies to acquire new technologies thereby boost their competitiveness. Mergers and acquisitions lead to an improved market reach and industry visibility thus grow their revenues as well as boost their standing in the investment arena. An
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