A few successful acquisition examples to motivate CEOs

A few successful acquisition examples to motivate CEOs

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

Among the countless types of acquisition strategies, there are two that people usually tend to confuse with each other, perhaps because of the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are 2 very separate strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in entirely unrelated industries or engaged in separate endeavors. There have actually been many successful acquisition examples in business that have involved two starkly different firms without any overlapping operations. Usually, the objective of this technique is diversification. As an example, in a situation where one services or product is struggling in the current market, firms that also have a diverse variety of additional products and services tend to be much more steady. On the other hand, a congeneric acquisition is when the acquiring business and the acquired firm belong to a comparable sector and sell to the same type of customer but have slightly different services or products. One of the primary reasons why firms could opt to do this sort of acquisition is to simply increase its line of product, as business individuals like Marc Rowan would likely verify.

Many people assume that the acquisition process steps are always the same, regardless of what the business is. Nevertheless, this is a frequent mistaken belief due to the fact that there are actually over 3 types of acquisitions in business, all of which feature their very own operations and approaches. As business individuals like Arvid Trolle would likely verify, one of the most frequently-seen acquisition techniques 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 company that is in a completely different position on the supply chain. For example, the acquirer company might be higher on the supply chain but opt to acquire a firm that is involved in a crucial part of their business procedures. Generally, 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 actually is. Not to be mixed-up with a merger, an acquisition is when one firm 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 sector, as business individuals like Robert F. Smith would likely understand. One of the most usual types of acquisition strategies in business is known as a horizontal acquisition. So, what does this mean? Basically, a horizontal acquisition entails one company acquiring an additional company that is in the very same market and is performing at a comparable level. Both companies are basically part of the very same market and are on an equal playing field, whether that's in manufacturing, financing and business, or farming etc. Typically, 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, in addition to opening-up the opportunity to help a firm widen its reach into new markets.