Some successful acquisition examples to motivate CEOs

Some successful acquisition examples to motivate CEOs

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When 2 companies undergo an acquisition, it is likely that they will do one of the following techniques

Among the many types of acquisition strategies, there are two that individuals tend to confuse with each other, possibly as a result of the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are two really independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unassociated sectors or engaged in separate endeavors. There have actually been many successful acquisition examples in business that have involved 2 starkly different businesses with no overlapping operations. Typically, the goal of this approach is diversification. For example, in a situation where one product and services is struggling in the current market, businesses that also own a diverse range of additional products and services tend to be a lot more secure. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired company are part of a similar market and sell to the same kind of consumer but have relatively different service or products. One of the main reasons why companies may choose to do this type of acquisition is to simply increase its line of product, as business individuals like Marc Rowan would likely validate.

Many people assume that the acquisition process steps are always the same, regardless of what the business is. Nevertheless, this is a standard false impression due to the fact that there are actually over 3 types of acquisitions in business, all of which feature their very own operations and approaches. As business individuals like Arvid Trolle would likely validate, among the most frequently-seen acquisition methods is called a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one business acquires another business that is in a totally different position on the supply chain. For instance, the acquirer company may be higher up on the supply chain but decide to acquire a company that is involved in a key part of their business operations. Overall, the beauty of vertical acquisitions is that they can bring in new income streams for the businesses, as well as decrease prices of manufacturing and streamline operations.

Before diving into the ins and outs of acquisition strategies, the very first thing to do is have a firm understanding on what an acquisition actually is. Not to be mixed-up with a merger, an acquisition is when one firm purchases either the majority, or all of another business's shares to gain control of that business. Generally-speaking, there are around 3 types of acquisitions that are most common in the business sector, as business individuals like Robert F. Smith would likely recognize. Among the most usual types of acquisition strategies in business is known as a horizontal acquisition. So, what does this mean? Essentially, a horizontal acquisition entails one company acquiring a different business that is in the same market and is performing at a similar level. Both firms are essentially part of the same industry and are on a level playing field, whether that's in production, finance and business, or farming etc. Commonly, they may even be considered 'competitors' with one another. On the whole, the primary advantage of a horizontal acquisition is the increased possibility of raising a business's customer base and market share, along with opening-up the chance to help a company expand its reach into brand-new markets.