Some successful acquisition examples to motivate CEOs

Some successful acquisition examples to motivate CEOs

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

Before diving right into the ins and outs of acquisition strategies, the 1st thing to do is have a solid understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one firm 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 typical in the business realm, as business people like Robert F. Smith would likely recognize. Among the most frequent types of acquisition strategies in business is known as a horizontal acquisition. So, what does this suggest? Basically, a horizontal acquisition entails one company acquiring an additional business that is in the 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 production, financing and business, or agriculture etc. Often, they could even be considered 'competitors' with one another. On the whole, the primary advantage of a horizontal acquisition is the increased possibility of enhancing a company's consumer base and market share, as well as opening-up the possibility to help a business broaden its reach into brand-new markets.

Amongst the countless types of acquisition strategies, there are two that people usually tend to confuse with each other, possibly as a result of the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are 2 really separate strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unassociated sectors or engaged in different activities. There have actually been numerous successful acquisition examples in business that have included two starkly different businesses with no overlapping operations. Normally, the objective of this approach is diversification. For instance, in a situation where one product and services is struggling in the current market, companies that also possess a diverse range of additional products and services have a tendency to be more steady. On the other hand, a congeneric acquisition is when the acquiring company and the acquired business belong to a similar market and sell to the same sort of client but have relatively different products or services. One of the major reasons why companies may opt to do this kind of acquisition is to simply broaden its line of product, as business people like Marc Rowan would likely verify.

Lots of people think that the acquisition process steps are always the same, regardless of what the firm is. However, 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 business might be higher 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 bring in new revenue streams for the businesses, along with lower costs of production and streamline operations.