Checking out the examples of acquisitions that succeeded

Checking out the examples of acquisitions that succeeded

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When 2 companies undergo an acquisition, it is likely that they will do one of the following approaches

Amongst the several types of acquisition strategies, there are 2 that people usually tend to confuse with each other, perhaps because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two really independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in totally unconnected industries or engaged in separate ventures. There have been lots of successful acquisition examples in business that have involved two starkly different companies without any overlapping operations. Generally, the objective of this technique is diversification. As an example, in a situation where one service or product is struggling in the current market, businesses that also own a diverse range of additional product or services tend to be much more steady. On the other hand, a congeneric acquisition is when the acquiring business and the acquired firm are part of a similar industry and sell to the same kind of client but have relatively different service or products. One of the main reasons why firms may opt to do this sort of acquisition is to simply expand its product lines, as business people like Marc Rowan would likely validate.

Many people assume that the acquisition process steps are always the same, no matter what the business is. Nevertheless, this is a standard false impression due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their own procedures and strategies. As business people like Arvid Trolle would likely confirm, one of the most frequently-seen acquisition strategies is referred to as a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another firm that is in an entirely different place on the supply chain. As an example, the acquirer firm might be higher on the supply chain but opt to acquire a business that is involved in a crucial part of their business procedures. In general, the beauty of vertical acquisitions is that they can bring in new income streams for the businesses, along with decrease prices of manufacturing and streamline operations.

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 business purchases either the majority, or all of another business's shares to gain control of that business. Generally-speaking, there are around 3 types of acquisitions that are most common in the business world, as business individuals like Robert F. Smith would likely recognize. Among 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 business that is in the same market and is performing at a similar level. The two businesses are primarily part of the exact same market and are on an equal playing field, whether that's in manufacturing, financing and business, or agriculture etc. Frequently, they might even be considered 'rivals' with each other. In general, the main benefit of a horizontal acquisition is the increased capacity of enhancing a company's consumer base and market share, along with opening-up the chance to help a company expand its reach into brand-new markets.