Why companies want merger and acquisition with other companies? Mergers and acquisitions (M&A) refers to the alliance of companies or assets. M&A can include various transactions, such as acquisitions, tender offers, mergers, consolidations, management acquisitions and purchase of assets. What are the reasons for mergers and acquisitions? Growth Mergers can provide the opportunity to the acquiring company to raise market share without gaining it by doing the work on their own – instead, they purchase the business of their competitor for a price. Generally, these are known as horizontal mergers. Collaboration The common word used in M&A is collaboration, also called synergy, which is the idea that by joining business activities, costs will reduce and performance will improve. Basically, a company will try to merge with another company that has balancing strengths and weaknesses.
Increase the pricing power of supply-chain By buying out one of the distributors or suppliers of another company, a business can eradicate a level of costs. If a company selects to buy out a distributor, it may become able to deliver its products at a cheap