Question

what are the similarities between mergers and acquisitions ?

Answer 1

mergers and acquisitions are very similar in nature by amalgamation.

amalgamtion is of two types i.e amalgamtion by merger & amalgamation by purchase/acquisition.

but here two words have different meaning.

At first the word merger means merging of two entities i.e in common language two entities are combining themselves and naming it as one entity.

Here the companies merger as one entity because to enhance their share capital and business & to enhance their shareholders wealth.

To be competitive in the environment by using each others assets and using the resources in a best possible way to strengthen the organisation.

it is a synergy benefit by merging the two entities into one entity.

eg. AS&co, BS&co are two different entities and they are merging each other and naming the new entitiy has abs&co.

At second the word acquisition means one financial sound entity takeover the other entity.

here one entity takeover other entity because of ,

other entity in losses and not able to convert their assets in to income.

not be competitive in the environment. Having ,more laibilities than assets.

so here the takeover another entity to strengthen their assets and resources to mobilise the resources in a best effective way to enhance their shareholders wealth.

g. As&co,Bs&co are here two different entities, here As&co takeover the bs&co.

in both above growth is main objective of the entities.

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