- This topic has 14 replies, 15 voices, and was last updated 1 year, 8 months ago by
S Sarala Maharaj.
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February 6, 2022 at 8:24 am #55785
Yanxuan Yang
MemberPresuming that most companies started their initial expansion through organic growth, what are some of the common drivers or thoughts that kick in such that companies switch their attention to source for potential M&A opportunities?
February 26, 2022 at 10:44 am #56562Woon Pheng Ong
MemberThe most common reason will be when businesses want to grow and expand. However, there could be other reasons, like seeking new technology, expand product / service line and have certain expertise.
March 7, 2022 at 1:15 pm #56887Markus Gustafsson
MemberAdding to above comment I would say synergies. To make 1 + 1 greater than 2 and hence create value.
March 10, 2022 at 5:00 pm #57279Laura Impelluso
MemberThe main reasons in my experience is to expand in new markets or also eliminate a competitor.
March 10, 2022 at 10:09 pm #57283Wambua Mumanthi Mutua
MemberMajority of corporations will seek M&As in order to gain a strategic advantage. The next big reason would to create a vertical or horizontal integration of the company. Finally, a company that has exhibited considerable organic growth, would want to invest its excess earnings in inorganic growth.
March 13, 2022 at 11:37 am #57404Po Huang
MemberExpansion to new market, access to new technology/products, achieve economy of scale, reduce competition…etc
March 13, 2022 at 2:21 pm #57408Fahad Al Sulaim
MemberTo add to the above comments, I have seen acquisition deals of oversees companies to relocate to to our country in an attempt to localize different product & services and contribute to the local economy. so far no failures.
October 9, 2022 at 3:24 pm #69914Anonymous
InactiveThere are good and bad reasons why companies M&A deals instead of organic growth. Too much cash, competitor elimination, and management hubris are among the bad ones. At the end of the day, M&A is only an instrument that should be used correctly. As with any project that the company takes it should have a positive NPV.
October 11, 2022 at 4:51 am #69965Aisyah Nisrina Hamidah
MemberCompanies pursue mergers and acquisitions for several reasons. The most common motive for mergers, for instance, increase in financial capacity–>lacking adequate financial capacity, a company may merge with another.
October 11, 2022 at 5:20 pm #69978Mike Truong
MemberCompanies should continuously consider M&A opportunities as part of the long-term strategy, focused on core competencies and close adjacencies. M&A may prove to be a viable option given other alternatives (e.g. “buy vs. build” approach), and the Strategy/Corporate Development teams will present options for consideration. Once a long-term strategy is approved, the M&A approach can begin.
December 20, 2022 at 8:14 pm #72599Brandon Lau
MemberM&A is a tactic to execute the corporate strategy. When a company plans to grow either expanding its market or launching a new product/service, instead of setting up a new local office or building a new product/service from the ground up, some companies choose to acquire or merge with another company that already has built-in infrastructure and market strategy, resulting in a faster time to market. M&A is one way to secure operations, product lines, customers, and industry positioning, but that doesn’t necessarily make it easy. The M&A process actually requires strategic thinking at its heart and planning, perseverance and patience to get it right.
January 4, 2023 at 9:47 pm #73021Rachel Boynton
MemberA changing payor landscape is another reason for acquisitions – the larger the company the more leverage with payors. Investors are also looking at many splintered industries as opportunities for consolidation to realize economies of scale.
January 7, 2023 at 2:06 pm #73186A.L.
MemberIdeally, for synergies. If it is for expansion, companies should evaluate clearly whether investing on their own would be better.
January 8, 2023 at 11:41 am #73211Haytham Wehbe
ParticipantCompanies will consider M&A opportunities whenever they found a growth prospects, to increase market shares through geographic expansion, adding new technologies or services. Factors such as synergies will play an essential role on this.
January 11, 2023 at 10:01 pm #73405S Sarala Maharaj
MemberThe missing bucket in M&A is Divestments- some companies divest in order to refocus on core businesses which they know well. This may present a situation where they sell a performing asset which simply does not fit into their business model but which can add geographic or product expansion to a buyer.
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