Mergers and Acquisitions

Mergers & Acquisitions Mergers and skills argon two commonly used ways to application strategies (David, 2007). A merger continues when one fast(a) assumes each the assets and all the liabilities of raw(prenominal) firm of about equal size (Answers.com, 2007). An acquisition occurs when a larger throne purchases a smaller attach to (David, 2007). Mergers and acquisitions ar usually performed in the hopes of realizing an economic gain. Here are more reasons for mergers and acquisitions. To provide improved capacity utilization To make cash in ones chips out use of the existing sales force To turn off management staff To self-possessed out seasonal trends in sales To gain access to tonic suppliers, distributors, customers, products, and creditors To gain mod technology Cost of debt reduced There are several(prenominal) advantages of an acquisition. These advantages embroil: revenue enhancements, cost reductions, lower valuees, change in det onating device requirements, and a lower cost of capital. Revenue whitethorn be increased through foodstuffing gains, strategic benefits, and market berth (Answers.com, 2007). If the company has effective advertising strategies, effective economies of distribution, a larger renewing of products or services, this causes marketing gains. Strategic benefits are the opportunities to enter new markets.

And lastly, acquisitions may reduce tilt (Answers.com, 2007). When competition is decreased, market power increases. Tax advantages may also prepare from mergers and acquisitions. This may occur when a targ et firm carries assets on its books with bas! is infra their market value (Daunt, 2003). For tax purposes, these assets could be more important if they were owned by another corporation that could increase their tax basis following the acquisition. Finally, a firm with surplus monetary resource may wish to acquire another firm. By distributing the cash as a dividend or exploitation it to repurchase shares, this bequeath increase income taxes for shareholders (Daunt, 2003). With...If you want to get a full essay, aver it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay