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How mergers and acquisitions impact companies

On Behalf of | Apr 18, 2023 | Mergers and Acquisitions |

Mergers and acquisitions present New York companies with an opportunity to drastically change the way they operate in the short term and the long term. However, these transactions not only present an opportunity for exponential growth, but they also create a certain degree of risk.

Beneftis of mergers and acquisitions

It takes years for most businesses to organically grow large enough to outdo their competitors. Mergers and acquisitions create opportunities for companies to expand quickly, leapfrogging their competition.

Mergers and acquisitions not only allow your company to expand through the purchase of another company, but they also prevent your competitors from reaping those benefits.

One of the most prominent motivations for businesses to merge with one another involves consolidating duplicate resources. For example, two similar businesses can merge together in order to eliminate regional offices, branches or other types of facilities. This saves both companies money as they regroup under a single umbrella.

Impacts of mergers and acquisitions

While mergers and acquisitions impact the companies directly involved, they also impact the entire industry. For instance, if the 10th and 12th largest companies in a particular industry merge, they likely surpass some of the companies in the industry that ranked higher than them before the merger.

Additionally, shareholders and investors of both companies involved in a merger or acquisition stand to benefit. Shareholders of the target company have the opportunity to cash out at a premium while shareholders of the acquiring company stand to reap long-term benefits as their stocks grow in value.

Some of the most successful companies in the world are the product of mergers and acquisitions. The companies involved in these deals feel the impact of them for years.