Friendly acquisitions often work toward the mutual benefit of the acquiring and target companies.Both companies develop strategies to ensure that the acquiring company purchases the appropriate assets, and they review the financial statements and other valuations for any obligations that may come with the assets.In 2000, in a masterful display of overweening confidence, the young upstart AOL purchased the venerable giant Time Warner for 5 billion; this dwarfed all records and became the biggest merger in history.
Friendly acquisitions often work toward the mutual benefit of the acquiring and target companies.Both companies develop strategies to ensure that the acquiring company purchases the appropriate assets, and they review the financial statements and other valuations for any obligations that may come with the assets.Tags: Inspirational Essays About FamilyTop Research PapersStudent Essay WritingAssign Pointer To PointerThermodynamics HomeworkBuy A Speech And OutlineBusiness Plan For PartnershipEssay On Visit To Museum Of Art
Such a company might look for promising young companies to acquire and incorporate into its revenue stream as a new way to profit.
Sometimes it can be more cost-efficient for a company to purchase another company that already has implemented a new technology successfully than to spend the time and money to develop the new technology itself.
They may seek economies of scale, diversification, greater market share, increased synergy, cost reductions, or new niche offerings.
Other reasons for acquisitions include those listed below.
In reality, mergers and acquisitions (M&A) occur more regularly between small- to medium-size firms than between large companies.
Companies acquire other companies for various reasons.Perhaps a company met with physical or logistical constraints or depleted its resources.If a company is encumbered in this way, then it's often sounder to acquire another firm than to expand its own.After the merger, AOL became the largest technology company in America.However, the joint phase lasted less than a decade.Mergers generally occur between companies that are roughly equal in terms of their basic characteristics—size, number of customers, the scale of operations, and so on.The merging companies strongly believe that their combined entity would be more valuable to all parties (especially shareholders) than either one could be alone.Once both parties agree to the terms and meet any legal stipulations, the purchase proceeds.Unfriendly acquisitions, commonly known as "hostile takeovers," occur when the target company does not consent to the acquisition.Certainly, the AT&T-Time Warner acquisition deal of 2018 will be as historically significant as the AOL-Time Warner deal of 2000; we just can't know exactly how yet.These days, 18 years equals numerous lifetimes—especially in media, communications, and technology—and much will continue to change.