The Different Merger Strategies Employed By Acquirers

1448 WordsMar 20, 20166 Pages
Critically examine the different merger strategies employed by acquirers Today’s business world hosts a phenomenon, a way to expand business activities by consolidating or buying another company, so called Mergers or Acquisitions (M&A’s). M&A’s is a corporate strategy that was introduced in the 1960s. It has experienced ‘waves’ of popularity and success while at the same time suffered criticism due to numerous failures. In today 's global, competitive environment, mergers are sometimes the only means for long-term survival. Mergers can be categorized as either horizontal, vertical or conglomerate. They also exhibit other characteristics, for example, they can be complimentary or supplementary in nature. A complimentary acquisition is one where the acquiring firm aims at compensating for some weakness or limitations it has. The target company may be an attempt to strengthen a process or enter a new market. For example, the acquiring firm may have strong research and development competencies but weak sales and marketing. The target company may have strong sales and marketing expertise but weak research and development expertise. Facebook’s acquisition of WhatsApp was to enable it to make up for its declining growth as WhatsApp is recorded to be the fastest growing company in the world with emerging and developing markets presence (Bloget, 2014). Or the driver may be geographic; the acquiring firm may not have a strong footprint in a specific location it is interested in and,

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