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Why do companies keep acquiring other companies through M&A? What are the benefits?


Kiana
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I am a small business owner and I was made aware over the past months of the rising trend of small to medium-sized businesses getting into M&A. I thought M&A was only for big companies. What are the benefits of this kind of agreement and what is the reason companies acquire other companies?

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There are many reasons why a business would acquire or merge with another business. The most common factor is for the growth and expansion of the business. A merger may give the buying company a chance to grow its market share.

Merging and acquiring a business can also significantly reduce the costs of developing business activities in terms of operational, technical and administrative matters. This will add leverage to the company’s growth and sustainability. The acquisition can also increase the supply-chain pricing power. The larger the company is, the lesser the interest in raw materials for the products. Aside from that, such M&A business restructuring is one way to eliminate possible competitors of the business.

Buying out a company or merging with another can be a good investment when it comes to accomplishing one company’s long-term goals. 

See my full article on M&A on this link: 

 

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