Question

Industry consolidation happens most often through:

a. Joint ventures

b. Mergers and acquisitions

c. Non-equity alliances

d. Equity alliances

e. none of the above

Answer 1

Industry consolidation happens most often through mergers and acquisitions. Industry consolidation is a phase where segments in the company or competitors merge with the others to gain the advantage of synergies and grab maximum market share. The objective is to increase the revenue line and company valuation to make the stocks more attractive to investors. The companies involved often experience benefits like cutting down cost, operations efficiency and discontinuing products lines which are not generating revenue.