Checking out the examples of acquisitions that succeeded

Checking out the examples of acquisitions that succeeded

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When 2 companies go through an acquisition, it is very likely that they will do one of the following strategies

Before diving into the ins and outs of acquisition strategies, the first thing to do is have a solid understanding on what an acquisition truly is. Not to be confused with a merger, an acquisition is when one company purchases either the majority, or all of another firm's shares to gain control of that business. Generally-speaking, there are about 3 types of acquisitions that are most common in the business sector, as business individuals like Robert F. Smith would likely know. Among the most prevalent types of acquisition strategies in business is referred to as a horizontal acquisition. So, what does this imply? Basically, a horizontal acquisition entails one company acquiring an additional company that is in the very same market and is performing at a similar level. Both firms are essentially part of the same sector and are on an equal playing field, whether that's in production, financing and business, or agriculture etc. Usually, they may even be considered 'competitors' with each other. In general, the main benefit of a horizontal acquisition is the increased potential of raising a business's customer base and market share, along with opening-up the opportunity to help a firm grow its reach into new markets.

Among the many types of acquisition strategies, there are 2 that individuals have a tendency to confuse with each other, probably because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two rather distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in totally unrelated markets or engaged in separate endeavors. There have actually been lots of successful acquisition examples in business that have included two starkly different businesses with no overlapping operations. Generally, the objective of this approach is diversification. For example, in a scenario where one services or product is struggling in the current market, businesses that also have a diverse variety of other product or services tend to be a lot more secure. On the other hand, a congeneric acquisition is when the acquiring business and the acquired firm are part of a similar sector and sell to the same type of client but have relatively different service or products. One of the primary reasons why businesses might choose to do this sort of acquisition is to simply expand its line of product, as business individuals like Marc Rowan would likely validate.

Many people presume that the acquisition process steps are constantly the same, no matter what the company is. Nevertheless, this is a common misunderstanding due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their own operations and approaches. As business people like Arvid Trolle would likely verify, among the most frequently-seen acquisition methods is known as a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one business acquires another firm that is in a completely different position on the supply chain. For instance, the acquirer firm might be higher up on the supply chain but decide to acquire a business that is involved in a crucial part of their business functions. Overall, the beauty of vertical acquisitions is that they can generate brand-new revenue streams for the businesses, as well as lower expenses of manufacturing and streamline operations.