Question

As an investor, would you be concerned if the company you are investing in tries to acquire a competitor? Please also explain why you feel one way or another.

Answer 1

As an investor, I would not be concerned if the company I am investing in tries to acquire a competitor due to the many benefits resulting from the acquisition, such as:

1. The synergy that would result from the acquisition from increased earnings and decreased costs.
2. Growth arising out of increase in market share.
3. The company would eliminate competition through the acquisition as they control the competition now.
4. The company would have lower costs by combining their operations and through economies of scale.
5. Increased talent such as talented employees, high performing sales team or technology innovators.

I hope that was helpful :)