Mergers & Acquisitions is a summary term with which we call the fusion of the organizations. Mergers may take place in two basic ways:
- Company fusion by merger
- Company fusion by acquisition
Company fusion indicates either processes involving the legal, organizational and economic joining of the organizations or enterprises, or the actual outcome of these processes. The fusion always takes place on several levels to be successful - particularly financial, property, legal, organizational, procedural or cultural.
Mergers & Acquisitions in practice: Fusions may be one of the methods to business growth. Unlike the organic growth it allows much faster growth and expansion of the enterprise. By its nature, however, fusion has a lot of hidden risks, especially the cultural-organizational aspect, which may be the reason of unsuccessful acquisition - merger of two companies with different cultures and organizational practices. Further risks are unrealistic estimates of future potential of participants in a merger, different or missing strategy and inexperience management with acquisition processes. Fusions are primarily used by large multinational corporations and, thus rapidly gaining new markets, acquire new technologies, patents, optimize their tax burden or allocate free capital.
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