A couple of successful acquisition examples to inspire chief executive officers

A couple of successful acquisition examples to inspire chief executive officers

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When 2 companies go through an acquisition, it is most likely that they will do one of the following approaches

Many people presume that the acquisition process steps are always the same, regardless of what the firm is. Nonetheless, this is a frequent false impression since there are actually over 3 types of acquisitions in business, all of which feature their very own operations and approaches. As business people like Arvid Trolle would likely confirm, one of the most frequently-seen acquisition methods is called a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another business that is in a totally different place on the supply chain. For example, the acquirer company may be higher up on the supply chain but opt to acquire a firm that is involved in a key part of their business procedures. Generally, the appeal of vertical acquisitions is that they can bring in new revenue streams for the businesses, as well as lower expenses of manufacturing and streamline operations.

Among the many types of acquisition strategies, there are two that individuals commonly tend to confuse with each other, perhaps because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are 2 very separate strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in totally unconnected sectors or engaged in different activities. There have been many successful acquisition examples in business that have involved two starkly different firms with no overlapping operations. Normally, the purpose of this technique is diversification. As an example, in a scenario where one product or service is struggling in the current market, companies that also own a diverse range of additional product or services often tend to be a lot more steady. On the other hand, a congeneric acquisition is when the acquiring business and the acquired business are part of a similar industry and sell to the same sort of client but have relatively different services or products. One of the main reasons why businesses could opt to do this sort of acquisition is to simply broaden its product lines, as business people like Marc Rowan would likely verify.

Before diving right into the ins and outs of acquisition strategies, the 1st thing to do is have a firm understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one business purchases either the majority, or all of another business's shares to gain control of that business. Generally-speaking, there are about 3 types of acquisitions that are most common in the business industry, as business people like Robert F. Smith would likely know. Among the most standard types of acquisition strategies in business is called a horizontal acquisition. So, what does this imply? Basically, a horizontal acquisition involves one company acquiring another firm that is in the same market and is performing at a comparable level. The two businesses are essentially part of the very same sector and are on an equal playing field, whether that's in production, finance and business, or farming etc. Commonly, they may even be considered 'rivals' with one another. Generally, the main benefit of a horizontal acquisition is the increased capacity of increasing a firm's consumer base and market share, in addition to opening-up the opportunity to help a firm broaden its reach into brand-new markets.