Bottom line, mergers can make people happy.
Sometimes, it can make stock prices go up, making shareholders happy. Officials who successfully worked on the deal, from managers to attorneys and financial people who put the details together, are often relieved it all came together well.
Even consumers might benefit if it a merger makes it easier to get ahold of a favorite product, preferably at a lower price.
Of course, not everyone is entirely happy, especially if part of a workforce now finds itself redundant after joining with similar counterparts. Or some mergers may end up not being as lucrative as planners expected once things shake out.
But in general, mergers can be a positive way to bring similarly-sized companies together. Learning about them can reveal some interesting things.
There are a lot of them
Parts of the 1980s were known for hostile takeovers, and the 2000s was known for tech bubble growing and bursting, the current period of time may be known the period of mergers. There were $4.7trillion worth of them in 2015, and more than $2 trillion by May 2018. They continue to be a useful method to raise funds.
They help spread the wealth
A company that is dominant in a market or country may find challenges trying to expand, everything from government regulations to scale to culture. But rather than pushing hard into a new space, a company can consider merging with an existing company that may already have its color in place.
There are different types
Saying “let’s merge” is only the beginning. Structuring the details of a merger can be done by consolidating and expanding, whether both companies are in different types of businesses or provide similar products or service to different parts of the country. There’s a congeneric merger, which is when a product line from one company/country now can be distributed by a former competitor; or a conglomerate, which takes place when firms not related to each other due to products or geography come together.
For information about mergers and other financial options. Contact us at Himsl Consulting today.