Mergers and acquisitions are often considered as same But have so many differences.
When a business grows drastically and the efficacy of its products and services is getting recognised gradually by people, then it needs to grow more to get higher revenues. So to expand one can go for either Merger or Acquisitions. (There are other ways as well but we will discuss about specifically merger and acquisitions in this blog post.)
Mergers refer to the voluntary fusion of two existing entities into a single new entity on broadly equal terms. There are five major types of Merger are Conglomerate, concentric, market extension, horizontal and vertical.
For example, We all must heard about Vodafone and Idea Merger in September 2020. Vodafone and idea merger is valued at $23 billion. Although the deal is happen to get some safeguard in telecom sector due to the entry of Reliance Jio and growing of cut-throat price competition in telecom industry.
Vodafone holds a stake of 45.1% in the combined entity with Aditya Birla group holding 26% stake and remaining by Idea.
Acquisitions refers to when one company purchases most or all of other companies shares to gain control of the company. It can be in the form of purchase, wherein one business buy another business.
For example, In 2005, Google acquired android, which was relatively unknown startup started few years back. The deal was estimated worth of approximately just $50 million. Android gave Google mobile operating system which is required to compete with Apple and Microsoft in the growing mobile industry. It is the most successful acquisition of google till date.
Globally, mergers and acquisitions deals hit new highs in 2021. Last year there are more than 62000 deals globally which is 24% more than deals in the year 2020.
Site Title 