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¶ … merger usually occurs when both companies are of relatively equal strength. The ideal behind this is that a merger would benefit both companies equally, merging the best elements of both companies in order to form a single company that is stronger than either on its own. The new company can then benefit in a variety of ways. Staff reductions for example means job losses, but for the overall revenue of the company, this is a benefit in salary savings. A merged company, being larger in scale than either of the companies before the merge, can also save on goods and equipment purchases. Orders in such cases become larger and can thus be negotiated with the seller. Another benefit is technological advances that become part of the newly merged company. A competitive edge can easily be established by merging the technological elements of both companies, and using the combined brainpower of technical personnel. Furthermore, when a company merges with another, market reach and industry visibility improve. Revenues and earnings grow by the merged company's increased reach and productivity. Furthermore capital...
Uncertainty created in this way can negatively affect the new company's general value and thus defeat the initial purpose of the merger.
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There are several elements that indicate whether a merger is working or not. The most important indicator is the purpose for which the merger takes place. Mostly, the purpose of the merger is financial benefit. When the merged company experiences a rise in revenue and other financial benefits, it can be seen as an indicator that the merger is working. Another important element is synergy. It is important that the cultures of the merged business be compatible and synergistic. When all personnel function harmoniously, this can then also be used as an indicator that the merger is working as planned.
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The advantage of an acquisition, as opposed to…
Sources
Business Link. (2005). "Mergers and Acquisitions: How your business can benefit." Cranfield School of Management. http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES& itemId=1074409301
Investopedia.com (2005). "Defining Mergers and Acquisitions." Investopedia, Inc. http://www.investopedia.com/university/mergers/mergers1.asp
Sherman, Andrew J. (2005) "Mergers and Acquisitions -- An Introduction." Kansas City, MO: Ewing Marion Kauffman Foundation. http://www.entreworld.org/Content/TopAdvise.cfm?ColumnID=220
Merger and Acquisition Mergers and Acquisitions Mergers and acquisitions (M&A) is an aspect of business strategy dealing with the amalgamation of two or more companies of similar entities or buying, selling or dividing different companies. Despite several common features of M&A, there is still a distinction between the two concepts. Merger is the amalgamation of two businesses of equal or nearly equal sizes; however, acquisition is the takeover of entire business of
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The most popular amongst these options is satellite television. Satellite television can be advantageous to consumers because there are more stations available to choose from and the price is the same or similar to that of cable television companies. Most recently the Internet has changed the manner in which people access the news, communicate with one another, and watch television programs. As a result cable television companies have attempted to
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