Merger Activity

Merger Activity In todays global transmission line environment, companies accommodate to grow to survive, and ace of the best ways to grow is by merging with another company (washingtonpost.com, 24.03.2008 ) A merger occurs when one tauten assumes all assets and liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist. In the later half of the twentieth century it became merry for a company to grow if it were to remain in much(prenominal) a warring marketplace. At this time, mergers and acquisitions became two of the more frequent methods to achieve the expansion and produce they required in give to survive. There are three main strategies of merger practise in which a firm can adopt, these are; horizontal, upright and conglomerate. The chosen strategy is dependent upon factors such as the competitive relationship between the merging parties and the financial position at the desired time of growth or integration. Merging is ordinarily performed in the hopes of realising an economic gain. For such a transaction to be justified, the two firms involved must be worth more together than they were apart. Overall, the potential advantages of mergers include; achieving economies of scale, combining complementary resources, garnering task advantages and eliminating inefficiencies.

Other reasons for considering growth through merging include obtaining branded rights to products or services, increasing market power by purchasing competitors, shoring up weaknesses in key business areas, acuate new geographic regions or providing managers with new opportunities for career growth and advancement. Merger act comes in waves of low and feverish activity which tend to correspond with periods when the stock market is buoyant with chop-chop rising share prices and when, therefore, the finance of mergers is easy to carry out. These periods as well tend to correspond to periods of rapid growth in the economy, when business confidence is high. In a... If you want to get a adequate essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.