Question

What are the strategic justifications, both offensive and defensive, for a merger or acquisition in the U.S. wine industry in general?

Answer 1

The strategy for merger and acquisition can varies from situation and condition of market , product and economic conditions.

In case of U.S. wine industry , the merger or the acquisition is offensive or defensive is being justified for each company’s perspective. When a company consider an acquisition as tool to protect  it from becoming a market failure due to slow growth rate in business , simply justified as defensive strategy . when a company consider acquisition as tool to increase in business by stopping others to work in the same market i.e. reduction in competitions., justify offensive strategy.

International Beverage’s quest acquisitions was considered a defensive action by company .

Starshine and Bel Vino merger is an example of offensive strategy to increase the market share for both companies.