Question

Why would a company want to merge or buy another company?

Answer 1

Ans- A company may want to merge or buy another company to grow its market share and remain competitive in the market. When one merges their company with others they can have access to their products and services too and thus can sell their products as their own and also can add varieties of products to their portfolio. In addition to these by merging with other companies, one can get the customer base of that company within a very short time and thus can sell their products to those customers thereby increasing their profitability. Mergers also gives a company to strengthen its position so that they can easily face the competition from the global as well as domestic markets and also by merging they eliminate their competition to some extent as when they have merged with that particular company who was previously their competitor then there will be no competition from that company as they are one company only under a single roof.

Manpower is the biggest asset of every organization and when one company merges with another company then they too get the talented workforce of that company and thus productivity level goes up and quality products and services are offered to the consumers. Mergers or buying another company is the shortest way to grow one's company into a big one without doing many things and therefore companies want to merge or buy other companies.