Discovering the examples of acquisitions that was successful

Discovering the examples of acquisitions that was successful

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When two companies go through an acquisition, it is likely that they will do one of the following strategies

Before diving into the ins and outs of acquisition strategies, the very first thing to do is have a firm understanding on what an acquisition truly is. Not to be mixed-up with a merger, an acquisition is when one firm purchases either the majority, or all of another firm's shares to gain control of that firm. Generally-speaking, there are approximately 3 types of acquisitions that are most typical in the business industry, as business individuals like Robert F. Smith would likely understand. One of the most usual types of acquisition strategies in business is referred to as a horizontal acquisition. So, what does this imply? Essentially, a horizontal acquisition entails one company acquiring a different firm that is in the exact same market and is performing at a similar level. The two businesses are primarily part of the very same market and are on an equal playing field, whether that's in manufacturing, financing and business, or farming etc. Commonly, they may even be considered 'competitors' with each other. On the whole, the primary advantage of a horizontal acquisition is the increased potential of raising a business's client base and market share, as well as opening-up the possibility to help a business grow its reach into new markets.

Among the several types of acquisition strategies, there are two that people commonly tend to confuse with each other, maybe because of the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are 2 really separate strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unconnected markets or engaged in separate ventures. There have been many successful acquisition examples in business that have included two starkly different businesses with no overlapping operations. Generally, the goal of this strategy is diversification. As an example, in a situation where one product and services is struggling in the current market, firms that also own a diverse variety of other product or services tend to be far more stable. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired company belong to a similar market and sell to the same type of client but have relatively different services or products. Among the primary reasons why businesses may opt to do this kind of acquisition is to simply increase its product lines, as business individuals like Marc Rowan would likely confirm.

Many people presume that the acquisition process steps are constantly the same, no matter what the business is. Nonetheless, this is a typical false impression because there are actually over 3 types of acquisitions in business, all of which include their very own procedures and strategies. As business individuals like Arvid Trolle would likely validate, one of the most frequently-seen acquisition techniques is called a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another business that is in an entirely different position on the supply chain. For instance, the acquirer firm might be higher up on the supply chain but opt to acquire a firm that is involved in a key part of their business procedures. Generally, the appeal of vertical acquisitions is that they can generate new income streams for the businesses, in addition to decrease prices of manufacturing and streamline operations.