Mergers and acquisitions are two different policies of any organization who want to be merged or want to accrue a new firm. Mergers occur when two almost identical companies come to the terms of broadening their business or give a way to one another.
SurajRajwani Gives Essential Principles of Mergers and Acquisitions Policy
Mergers and acquisitions is the prime focus of any investor as they can raise or lower the value of company stocks. Even they are also appealing to the organization owner due to the fact they can have favorable or unfavorable effects on business taxes if the company is acquired by another business Enterprise.
Hostile takeover is same technique where businesses can be purchased or merged against the will of the owner. It can happen anytime a business is purchased by a corporate entity, but the owner do not in the position or will to sell. Hostile Takeover typically occurs when a business organization offers stocks with is traded by the stock market.
The reasons behind takeover are very, one of the primary reasons is money. Big corporations are basically interested in taking over smaller business firms which have exceptional brand recognition with large customer databases and technological innovations.
Friendly takeover or merger are very beneficial to all the concerning parties instead of hostile one. The retaining clientele, employees and technologies belongs to the entity are the basic profits of the new owners as this gives them on the spot resources to run the business.
There are so many kinds of business mergers, a few of them are well-known includes: vertical, horizontal, conglomeration, market-extension, and product extension.
It involves companies that sell or manufacture products that are identical to each other. For instance, if two agriculture based companies like popcorn production entity will merge with a food based entity or a sewing machine manufacture might merge with a fabric company.
This refers to companies that directly compete with one another. For instance, an entity that produces exercise clothing for the sports persons could merge with a sporting goods company.
Companies which produces unrelated products are in the state of Conglomeration if the merges. For instance, a company that manufactures agro products might merge with a company busy in making cell phones.
Market-extension mergers: are well-known includes: vertical, horizontal, conglomeration, market-extension, and product extension.
Market-extension mergers are those companies who sells identical goods and services in different markets like an IT firm offers its services in North America and another in Africa there merger will be an extension of the business in various parts of the world.
When two companies producing almost identical products and sells them at the same market then product-extensions occurs. For instance a Black tea producing firm sells its products in America and another firms making black tea also sells its products in America might be merge to block the path of other new firms.
Difference between Mergers and Acquisitions:
When two companies of almost identical and equal in size and production and distributions come to decision that joining together will be profitable and make a deal to do so. Both the companies surrender stocks and then new stock is issued to the two together.
Acquisition: are well-known includes: vertical, horizontal, conglomeration, market-extension, and product extension.
It occurs when a smaller company, usually struggling finance, gets bought by a larger one, who then acquires all of their stock and swallows it as part of their business.
Suraj Kumar Rajwani Co-founder of DoubleRock California is an expert in dealing with online business strategies he is continuously providing the best deals and ideas to the portfolio companies that DoubleRock dealing with. To know more about SurajRajwani feel free to visit him here at: http://soundcloud.com/surajrajwani
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