The merger of two or more businesses is a strategic action that may open doors to growth and success. It can also increase operational efficiency, reduce competition and costs, and gain market share and access to technology. A business merger can be “friendly” if both companies agree to the deal and benefit from it, or “hostile” if one company benefits more than the other. In either case, tax debts, legal judgments and liens on real or personal property can attach to the new company upon its creation. To minimize these problems, a business should always perform thorough diligence and fact-finding before committing to a deal.
Whether you are in the process of expanding into new territories or looking at the long-term possibilities of a sale or investment, merging with another business could offer powerful opportunities for growth and increased profitability. A successful strategy can help you achieve your goals more quickly and efficiently, and improve your position for the future.
Aside from adding new revenue streams, a merge can open up cross-promotions and package deals that will enhance existing customer relationships. The buy-side, on the other hand, can tap into a portfolio of businesses and reduce — or even remove – the barrier to entering other markets or locations.
One common reason for a merger is to eliminate duplication of products or efforts. Bringing together a diverse array of business models, expertise and resources can result in more efficient operations that provide better pricing for customers and a more focused approach to product development.