Mergers and acquisitions may seem like a complex process. However, undertaking how they work in New York can provide beneficial information for customers and reveal how business law functions as a way to protect society.
What are mergers and acquisitions?
Mergers and acquisitions are common in the U.S. because they can help companies grow in a short amount of time. A merger is when one company buys, acquires or joins with another business. This often happens to limit the number of companies selling a product or to increase the customer base a company may reach.
In many ways, mergers are essential to the U.S. because they are part of a free-market economy. In this type of economy, companies compete to provide goods, like televisions, and services, such as pet grooming. Customers should ultimately benefit from better quality products and prices when businesses compete.
However, to maintain a free market economy, businesses must not be able to control an entire industry or field. In these instances, U.S. law allows the government to prevent companies from merging and creating a monopoly. Thus, preventing companies from controlling prices and forcing customers to pay too much for items.
How mergers and acquisitions can benefit society
While the government can work towards preventing a merger of companies, in many instances, having two or more companies join together can be beneficial for the economy. When companies merge, they can help provide products and services to customers better and more efficiently. Moreover, with a merger, companies typically cut their own costs and may pass the savings along to their customers.
Company mergers are common business practices designed to help businesses increase their profits and expand their products to new customers. And while the government can step in to prevent a merger, ultimately, what is best for the consumer should be the primary focus.