A few successful acquisition examples to motivate CEOs

A few successful acquisition examples to motivate CEOs

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Listed here are a few company techniques relating to acquisitions

Among the countless types of acquisition strategies, there are two that people commonly tend to confuse with each other, perhaps because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two very distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unassociated sectors or engaged in different activities. There have been lots of successful acquisition examples in business that have included two starkly different companies with no overlapping operations. Normally, the purpose of this approach is diversification. For example, in a situation where one services or product is struggling in the current market, firms that also have a diverse variety of additional product or services often tend to be more stable. On the other hand, a congeneric acquisition is when the acquiring company and the acquired company are part of a similar industry and sell to the same type of customer but have slightly different services or products. One of the main reasons why companies might decide to do this kind of acquisition is to simply broaden its product lines, as business people like Marc Rowan would likely confirm.

Many people assume that the acquisition process steps are always the same, no matter what the company is. However, this is a common misunderstanding because there are actually over 3 types of acquisitions in business, all of which come with their own operations and approaches. As business individuals like Arvid Trolle would likely verify, one of the most frequently-seen acquisition techniques is known as a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another firm that is in an entirely different place on the supply chain. For instance, the acquirer business may be higher up on the supply chain but opt to acquire a firm that is involved in a crucial part of their business procedures. In general, the beauty of vertical acquisitions is that they can bring in brand-new revenue streams for the businesses, in addition to lower costs of production and streamline operations.

Prior to diving right into the ins and outs of acquisition strategies, the initial 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 company purchases either the majority, or all of another company's shares to gain control of that firm. Generally-speaking, there are approximately 3 types of acquisitions that are most popular in the business sector, as business individuals like Robert F. Smith would likely understand. One of the most typical types of acquisition strategies in business is known as a horizontal acquisition. So, what does this mean? Essentially, a horizontal acquisition entails one company acquiring a different firm that is in the very same market and is performing at a similar level. The two businesses are generally part of the exact same industry and are on a level playing field, whether that's in production, finance and business, or farming etc. Commonly, they may even be considered 'competitors' with each other. Generally, the main benefit of a horizontal acquisition is the increased capacity of enhancing a firm's client base and market share, in addition to opening-up the opportunity to help a firm grow its reach into new markets.