Understanding Mergers and Acquisitions

1932 Words8 Pages
Introduction The inherent business practice of acquiring other , usually competitive, companies is part of a risky but potentially big payout for the risk taker. To understand the true and relative impacts of mergers and acquisitions, it is necessary to examine organizations that both avoid and undertake these types of financial deals. The purpose of this essay is to examine two distinct companies and their business strategies in order to understand the practicality and feasibility of corporate mergers. This essay will examine two companies within the retail sales industry that have taken two separate approaches to attaining a competitive advantage. Kohl's Corporation is a public company traded on the New York Stock Exchange headquarter in Milwaukee, WI. In this essay, Kohl's represents a company who has not taken part in large mergers during its incorporation. Sears Holding Incorporated is a large company that has recently merged from Sears Roebuck and Kmart. Sears Holding Inc. represents an international company that has existed with the aid of mergers and acquisitions and will serve as the counter-example to Kohl's in order to analyze the effectiveness of both companies. Understanding Mergers and Acquisitions Schamotta (2012) described four distinct advantages for companies to merger. These include: reduced costs, market penetration, diversification and to acquire important skills and knowledge. He stated that " mergers typically involve two relatively equal
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