Mergers & Acquisitions
What are Mergers and Acquisitions?
Mergers and Acquisitions refers to the consolidation of two individual companies to create one new entity. If you are a shareholder in a company this is a significant development and can have a significant outcome on the share price. It’s important to not only be aware of such a movement but also to have a full understanding of both existing companies that are about to merge and the potential outcomes after the merger.
Why do companies use Mergers and Acquisitions?
A merger is designed to strengthen an existing company and its assets as a growth strategy. If you are an investor this is a potential sign that there will be some market activity upon this initial announcement and the eventual outcome. Acquisitions are also an investment prospect for you if a company has declared it’s about acquire another entity. This could be profitable for you as an outcome depending on the scale of the acquisition and how long the acquired product or entity takes to match the intended outcome.