The success of every company depends on timely growth in response to changes in your market and milestones in your company’s life-cycle, in order to increase profits and competitive potential. When it is not advisable or possible to grow through acquisitions, a merger can sometimes achieve the same goal.
When is a Merger the Right Option?
Mergers involve two partners who combine their managerial and operational functions to form a new company with shared resources, established markets and business goals. The goal is to achieve a combined strength that is greater than a simple partnership.
The most common types of mergers are: “horizontal” (between competing companies in the same market sector and roughly the same market position) and “vertical” (between companies in the same sector but with one having a higher position).
A number of benefits can be realized from a well-planned merger: a stronger industry position, improved competitive strength or scope, more efficient use of resources, survival during a market down-turn, elimination of duplicate functions for more cost-effective operation, achieving a critical mass for expansion of branding or geographical markets, and/or entry into new market opportunities through diversification.
However, effecting a merger is a complex undertaking and involves important issues such as strategic and operational compatibility, common ground in corporate culture, shareholder control and influence, and manager interaction and employee relationships, to name a few.
Lev2Tech can advise you on how to prepare a merger, identify the best candidates, manage the merger process and put the merger into effect successfully.Read more...