A number of successful acquisition examples to inspire chief executive officers

A number of successful acquisition examples to inspire chief executive officers

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Firm acquisitions can be a complex procedure; here are the various strategies that business leaders employ

Among the countless types of acquisition strategies, there are 2 that individuals commonly tend to confuse with each other, probably as a result of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are 2 really distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in totally unassociated industries or engaged in separate activities. There have actually been several successful acquisition examples in business that have included 2 starkly different businesses without any overlapping operations. Normally, the goal of this technique is diversification. For instance, in a circumstance where one service or product is struggling in the current market, firms that also have a diverse range of other products and services tend to be more secure. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired business are part of a similar industry and sell to the same sort of client but have slightly different products or services. Among the primary reasons why firms might decide to do this sort of acquisition is to simply broaden its product lines, as business people like Marc Rowan would likely validate.

Before diving into the ins and outs of acquisition strategies, the first thing to do is have a solid understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one company purchases either the majority, or all of another company's shares to gain control of that firm. Generally-speaking, there are about 3 types of acquisitions that are most common in the business sector, as business individuals like Robert F. Smith would likely understand. One of the most common types of acquisition strategies in business is called a horizontal acquisition. So, what does this indicate? Essentially, a horizontal acquisition entails one company acquiring an additional company that is in the same market and is performing at a comparable level. The two companies are primarily part of the same sector and are on an equal playing field, whether that's in production, financing and business, or agriculture etc. Usually, they may even be considered 'competitors' with each other. Generally, the main benefit of a horizontal acquisition is the increased capacity of increasing a firm's customer base and market share, as well as opening-up the possibility to help a company expand its reach into brand-new markets.

Many people think that the acquisition process steps are always the same, no matter what the company is. Nonetheless, this is a frequent mistaken belief because there are actually over 3 types of acquisitions in business, all of which include their own operations and strategies. As business individuals like Arvid Trolle would likely verify, among the most frequently-seen acquisition techniques is called a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another business that is in an entirely different position on the supply chain. For example, the acquirer business may be higher on the supply chain but opt to acquire a company that is involved in a crucial part of their business functions. In general, the appeal of vertical acquisitions is that they can generate new earnings streams for the businesses, along with lower prices of production and streamline operations.