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Mergers & Acquisitions: Which is beneficial?
Digital Marketing
Emma Wilson
July 25, 2019

The merger is when more than two or more groups of companies take a major decision to come and start a common business together. Acquisition is when one company can buy another based on its portfolio. The merger is the process by which two or more companies take a strategic decision to come and merge together as one company with a new name. 

Merger helps the company to share information, technology, resources etc. thereby increasing the overall strength of the company. The merger also helps in reducing the weakness and gain a competitive edge in the market. Merger always happens on friendly terms as the information has already been passed to the directors, employees etc. and proper planning is done on the structuring of the new company.

The acquisition is the process by which one company acquires another company. The financially strong company acquires more than 50% of shares to take over another company. The acquisition doesn’t always happen on friendly terms. It can be a forced move by a company to acquire another company for various reasons like gaining new markets or gaining new customers or reducing competition etc. 

But acquisition can also happen when one company decides to be acquired by another company without any hostility. In an acquisition, the transition is not always smooth as the company that took over will impose all the decisions on staffing, structure, resources etc. and thereby creating an air of unease to the company that was acquired and to its employees.

When we compare mergers vs acquisitions, we may decide that a merger is always better than acquisition. But just like how each coin has two sides, both mergers vs acquisitions have their strengths and weaknesses.

Companies take these decisions based on the situation they are at and the resultant discussions that they have had with the other companies. So, it is wise for companies to carefully analyze the situation that they are in and take the strategic decision that better suits the scenario and demands.

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