Business merger is an agreement that unites two existing companies into one new company. The two company joins together voluntarily to form one legal entity. The companies that joins together are companies that are roughly of the same size, same number of customers and of the same scale of operation. The process of merging firms is done with an intention of benefiting the shareholders of the two companies. In USA, over the past years, there are many firms that have merged and at long last they have prospered. The process of merging businesses is facilitated by consulting companies such as Slalom which helps organizations to transform and integrate. Click here for more information.
Merger is important because it eliminate competition. When companies in the same industry, that offers the same good or service joins together, they start working in harmony. The two business will no longer have to work against each other. The new merged company will claim a larger market compared to the actual portion of the market that they would have claimed if they operated as separate entities. In addition, merging two companies will mean that they will streamline their services.
Merger will improve the efficiency of the new merged company. When two companies merges, the level of redundancy diminishes which will mean the company is efficient. For example, when two company merges, it will no longer be important for each company to have a marketing department, accounting department or human resource department. The departments will be integrated in to one, for a common goal.
Mergers saves the company money. This is because the overall cost incurred will be significantly reduced. The company for example, will no longer need to rent to separate offices. The marketing costs such as advertising will be combined. This will save the company’s money. Staffing cost will also be reduced because the new restructuring of the company. Positions that are redundant will either be combined together or otherwise eliminated. You can also get these services at www.slalom.com.
Merger helps a company to grow. Merging enables satisfactory and balanced growth of a company. A company can cross very may stages of growth through merger. The number of customers will also grow. This is because, the new company will be able to tap the old customers of the two companies and add new ones. The company will then gain access to a new market because it will be able to do market research.
Another benefit of merging business is synergy. Synergy refers to the larger value of the merged company than the combined value of individual firms. The overall business activities of the two will increase and cost will drop. Its results from benefits other than those of economies of scale. Synergetic benefits includes operating economies, enhanced managerial capabilities etc.
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