Discovering the examples of acquisitions that was successful

Discovering the examples of acquisitions that was successful

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Below is a brief guide to understanding the various acquisition choices and approaches that business leaders can choose from

Before diving right into the ins and outs of acquisition strategies, the 1st thing to do is have a solid understanding on what an acquisition truly is. Not to be confused with a merger, an acquisition is when one business purchases either the majority, or all of another business's shares to gain control of that firm. Generally-speaking, there are about 3 types of acquisitions that are most popular in the business world, as business people like Robert F. Smith would likely recognize. Among the most common types of acquisition strategies in business is referred to as a horizontal acquisition. So, what does this mean? Essentially, a horizontal acquisition involves one company acquiring a different firm that is in the same market and is performing at a comparable level. The two companies are essentially part of the exact same market and are on an equal playing field, whether that's in production, financing and business, or farming etc. Frequently, they may even be considered 'rivals' with each other. Overall, the primary benefit of a horizontal acquisition is the increased possibility of enhancing a firm's client base and market share, as well as opening-up the opportunity to help a company broaden its reach into new markets.

Among the several types of acquisition strategies, there are 2 that individuals commonly tend to confuse with each other, perhaps due to the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are two rather independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in entirely unconnected markets or engaged in different endeavors. There have been many successful acquisition examples in business that have included 2 starkly different firms with no overlapping operations. Generally, the goal of this technique is diversification. For example, in a situation where one services or product is struggling in the current market, businesses that also have a diverse range of additional product or services have a tendency to be more stable. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired business are part of a comparable market and sell to the same type of client but have slightly different products or services. One of the major reasons why firms could choose to do this sort of acquisition is to simply expand its product lines, as business people like Marc Rowan would likely validate.

Lots of people assume that the acquisition process steps are always the same, whatever the business is. However, this is a common mistaken belief due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their very own procedures and strategies. As business individuals like Arvid Trolle would likely validate, one of 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 company acquires another firm that is in a completely different place on the supply chain. For example, the acquirer firm may be higher on the supply chain but opt to acquire a company that is involved in a crucial part of their business operations. On the whole, the appeal of vertical acquisitions is that they can bring in brand-new revenue streams for the businesses, in addition to decrease prices of production and streamline operations.