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Shortly explain on expansion through acquisitions…

Shortly explain on expansion through acquisitions and mergers.

Shortly explain on expansion through acquisitions and mergers.

Chiranjibi Mar. 08, 2018

Acquisitions and mergers are basically combination strategies.

Some organizations prefer to grow through mergers.

Merger is considered to be a process when two or more companies come together to expand their business operations. In such a case the deal gets finalized on friendly terms and both the organizations share profits in the newly created entity. In a merger two organizations combine to increase their strength and financial gains along with breaking the trade barriers.  

On the other hand, when one organization takes over the other organization and controls all its business operations, it is known as acquisition. In this process of acquisition, one financially strong organization overpowers the weaker one. Acquisitions often happen during recession in economy or during declining profit margins. In this process, one that is financially stronger and bigger establishes it power.

The combined operations then run under the name of the powerful entity. A deal in case of an acquisition is often done in an unfriendly manner, it is more or less a forced association where the powerful organization either consumes the operation or a company in loss is forced to sell its entity.