Mataracy
VIP Contributor
What is merger?
Merger can be defined or described as a way in which two company come together to form one entity.
Acquisition in the other is a situation where by a company that is more superior acquired the smaller or less superior one.
An entity can grow quickly by the means of merger or acquisitions.
Both merger and acquisitions involves the creation of a single entity from two separate entities.
- With merger ,the two entities that come together are approximately the same size.--
- With acquisition, one entity is usually larger than the other and acquires ownership (control) by purchasing a majority of the equity shares.
Acquisitions are more common than mergers but larger mergers are possibly more significant, because that can create market leaders in their industry.
One if the advantages this has over internal development are:
(1)Faster growth
(2) Imidiate ownership if new products ,new market, new customers.
(3) An acquisition prevents a competitors from making the acquisition instead.
(4) It might result in cost savings and higher profit(synergy)
Though there is nothing that has advantages without a disadvantages no matter how small it may be.
The disadvantage if this strategy are:
(1) An acquisition might be expensive
(2) A merger or acquition can result in a loss of proportionak ownership of the entity.
(3) Different organisation structures, different management style, different culture,different system vod salaries and wages.
More idea is needed.
What is merger and acquisition?
Merger can be defined or described as a way in which two company come together to form one entity.
Acquisition in the other is a situation where by a company that is more superior acquired the smaller or less superior one.
An entity can grow quickly by the means of merger or acquisitions.
Both merger and acquisitions involves the creation of a single entity from two separate entities.
- With merger ,the two entities that come together are approximately the same size.--
- With acquisition, one entity is usually larger than the other and acquires ownership (control) by purchasing a majority of the equity shares.
Acquisitions are more common than mergers but larger mergers are possibly more significant, because that can create market leaders in their industry.
One if the advantages this has over internal development are:
(1)Faster growth
(2) Imidiate ownership if new products ,new market, new customers.
(3) An acquisition prevents a competitors from making the acquisition instead.
(4) It might result in cost savings and higher profit(synergy)
Though there is nothing that has advantages without a disadvantages no matter how small it may be.
The disadvantage if this strategy are:
(1) An acquisition might be expensive
(2) A merger or acquition can result in a loss of proportionak ownership of the entity.
(3) Different organisation structures, different management style, different culture,different system vod salaries and wages.
More idea is needed.
What is merger and acquisition?
