Objectives of mergers and acquisitions of companies
Source: shutterstock.com
Monopolization of the market
Competition plays a key role in a market mexico number for whatsapp economy, but monopolization can change the dynamics of the market. Acquiring small competitors allows you to dominate your field and control the pricing of goods and services. Bright examples of monopolization from large IT giants are Google and Facebook, whose influence extends beyond information technology. Their decisions shape public opinion, influence politics and the economy. The companies are not afraid even of huge fines from antitrust authorities.
Strengthening state regulation of the economy
This occurs through mergers and acquisitions of enterprises and organizations with state participation with private companies. This process contributes to strengthening state control over various industries, especially in the financial sector, where semi-state banks are actively acquiring private structures.
Avoiding bankruptcy
When a company is on the verge of bankruptcy and experiencing financial difficulties, joining a more financially stable organization may be a way to solve the problem.
Advantages and Disadvantages of Mergers
Merging companies has its advantages and disadvantages. Among the advantages are:
increasing the level of competitiveness;
increasing production standards;
expansion of the scope of financial and economic activity;
the opportunity to promote a new product or service;
increasing income levels and profitability.
Many companies undergo merger procedures in order to improve their image and pay off debts to creditors and suppliers.
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Merging with another company also has some disadvantages:
complexity of the procedure;
the need for lengthy preparation;
increase in expenses;
the emergence of internal problems due to the rejection of the company's new corporate policy.
Some disadvantages of the merger procedure are revealed only after it has been carried out, so it is necessary to weigh all the pros and cons before making a final decision.