Acquisitions and mergers involve the process of purchasing a smaller company or joining two larger companies together when it makes financial sense. As mentioned in the video, this process requires the insight and footwork of highly skilled and knowledgeable industry experts.
Mergers are when two companies combine to work together. For example, a large company may notice that it could benefit financially by partnering with another company that works in a field that provides benefits. The two companies combine into one large unit and combine their resources together to streamline business or offer new solutions to their customers.
Acquisitions occur when a larger company decides to buy out a smaller company. In most cases, all the company’s assets are purchased, but the workforce in place may not be transferred to the new company. The purchasing company may sell off parts of the old company in the form of stock or absorb assets for their own use.
Frequent Corporate Business Practices
In the corporate business world, mergers and acquisitions are common and a natural part of the landscape. These changes only occur when there is a financial advantage to one or both companies, but this type of action can occur in almost any industry.