Mergers and acquisitions: meaning, motives, features
The question of how to develop a business remains relevant for company management. There are two tactics: organic growth (due to internal reserves) and a significant increase in the scope of activities due to mergers and acquisitions. The rules for acquiring a new unit depend on the method: merger – firms merge voluntarily on mutually beneficial conditions; Acquisition – a purchase of one company by another (may occur without the voluntary consent of the acquired one).
Benefits of Mergers and Acquisitions
The purpose of acquiring an enterprise is to increase the total value of the company’s assets due to the benefits of joint ventures. The motives for combining are different:
- get the benefit from lower costs for the purchase of raw materials (by increasing the volume of lots);
- acquire additional benefits from the growth of turnover and stock prices;
- reducing the cost of the absorbing company for the implementation of research and development, development of new technologies available in the absorbed company;
- reduction in the cost of attracting customers due to the common customer base.
The merger process is appropriate if it is necessary to obtain large loans when entering the world market, in order to increase competitiveness in the context of a narrowing market. The main advantage is the rapid achievement of development goals, the expansion of geographical presence with minimal costs for attracting customers. The purchase price includes the work of a talent acquisition specialist.
Data Room – Guarantor of transaction security
The M&A data room by vdr-usa.info has been developed specifically for the safety of the M&A process. The process involves obtaining the data of the acquired company, legal support of the transaction, purchase of assets. The data room guarantees confidentiality, information protection from competitors. Virtual data room providers offer these benefits:
- Prevention of leaks and compromise of the company’s achievements.
- Ability to set additional levels of protection.
- Reduced traffic: data room providers have automatically converted email attachments to secure links.
- Continuous monitoring of the use of corporate documents: detailed scheduled reports.
- Ease of use: no employee training required thanks to an intuitive interface.
Virtual data room services are affordable even to ordinary users, especially large corporations. The virtual data room software is maintained by the vendor around the clock. Cloud service works without interruption, without stopping for maintenance.