Several successful acquisition examples to inspire chief executive officers

Several successful acquisition examples to inspire chief executive officers

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Company acquisitions can be a difficult process; below are the different techniques that business leaders use

Among the several types of acquisition strategies, there are 2 that people often tend to confuse with each other, possibly because of the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are two very independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in entirely unassociated markets or engaged in separate activities. There have been many successful acquisition examples in business that have included 2 starkly different firms with no overlapping operations. Usually, the purpose of this approach is diversification. As an example, in a circumstance where one service or product is struggling in the current market, firms that also own a diverse range of additional services and products have a tendency to be more secure. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired business are part of a comparable sector and sell to the same kind of customer but have relatively different service or products. Among the primary reasons why companies could choose to do this type of acquisition is to simply expand its product lines, as business individuals like Marc Rowan would likely confirm.

Before diving right into the ins and outs of acquisition strategies, the very first thing to do is have a firm understanding on what an acquisition truly is. Not to be confused with a merger, an acquisition is when one company purchases either the majority, or all of another firm's shares to gain control of that business. Generally-speaking, there are around 3 types of acquisitions that are most popular in the business industry, as business people like Robert F. Smith would likely recognize. One of the most common types of acquisition strategies in business is called a horizontal acquisition. So, what does this imply? Essentially, a horizontal acquisition entails one company acquiring another firm that is in the exact same market and is performing at a comparable level. Both companies are generally part of the same sector and are on a level playing field, whether that's in manufacturing, finance and business, or agriculture etc. Commonly, they might even be considered 'rivals' with one another. On the whole, the main benefit of a horizontal acquisition is the increased capacity of increasing a firm's client base and market share, along with opening-up the chance to help a company enlarge its reach into new markets.

Many individuals presume that the acquisition process steps are constantly the same, regardless of what the company is. Nevertheless, this is a common false impression because there are actually over 3 types of acquisitions in business, all of which feature their own operations and strategies. As business people like Arvid Trolle would likely validate, one of the most frequently-seen acquisition techniques is called a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another company that is in a totally different place on the supply chain. For example, the acquirer business might be higher up on the supply chain but decide to acquire a firm that is involved in a key part of their business procedures. On the whole, the beauty of vertical acquisitions is that they can bring in brand-new income streams for the businesses, in addition to decrease prices of production and streamline operations.