Question

10. Mention some motivation and advantages for merger and acquisition. (minimum 5 items)

Answer 1

Some benefits and motivations of merger and acquisitions are as follows-

1. The foremost motivation of M&A is the new synergies possible between the acquirer and the target. By merging, it can lead to new product development, economies of scale or vertical integration which can improve the profitabilities of businesses.

2. Some tax-advantages of M&A are also there which can make the mergers more lucrative.

3. It can also lead to diversification of an existing business leading to decrease in risk for a business.

4. Sometimes mergers with companies in different geographies can open access to large and untapped markets which can help in increasing the bottom line.

5. One other advantage in some special situations can be access to a cheaper workforce.