Merging a Business
Why a Merger
We are prepared to be in the thick of it, to assist you in either finding you a company to where you can combine your current operations to become one entity or to assist you in finding a business that you can partner with. A Merger allows you to access larger markets, expand your current customer base and to reduce same space competition. The process allows you to achieve economies of scale while effectively increasing profit margins.
Strategic Alliance involves two or more companies entering into a contractual relation in effort to mutually and strategically co-operate within one another. Different than a merger, assets and company management are utilized in co-operation than merged. This option is also less complex and contractually binding than a joint venture and allows each company to keep its joint venture
Types of Mergers
Product Extension Merger
This is sometimes called a congeneric mergers. Such mergers happen between companies operating in the same market. The merger results in the addition of a new product to the existing product line of one company. As a result of the union, companies can access a larger customer base and increase their market share.
Companies operating in markets with fewer such businesses merge to gain a larger market. A horizontal merger is a type of consolidation of companies selling similar products or services. It results in the elimination of competition; hence, economies of scale can be achieved. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry
Market Extension Mergers
Companies operating in different markets, but selling the same products, combine in order to access a larger market and larger customer base. A market extension merger takes place between two companies that deal in the same products but in separate markets. The main purpose of the market extension merger is to make sure that the merging companies can get access to a bigger market and that ensures a bigger client base.
Product Extension Mergers
Sometimes called a Horizontal merger, this merger is a type of consolidation of companies selling similar products or services. It results in the elimination of competition; hence, economies of scale can be achieved. A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits
This occurs when companies operating in the same industry, but at different levels in the supply chain, merge. It helps to increase synergies, supply chain control, and efficiency. A merger between two companies producing different goods or services for one specific finished product. Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one
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