World Class Mergers & Acquisitions  |  For Companies $5 Million to $100 Million in Revenue

Corporate Mergers & Acquisitions, Business Financial Advisor, Business Valuations, Debt & Equity Financing

Pros and cons of Corporate Mergers

Corporate mergers refer to the process where one company merges with another, often to form a new company. Closely related to merger is the concept of an acquisition. This is when one company acquires a controlling interest in another.

There are 3 main types of Corporate Mergers.

Horizontal mergers, vertical mergers and conglomerate mergers. In a horizontal merger two or more similar companies merge. The benefits of a horizontal merger lie in in economies of scale as well as the elimination of competition.

In a horizontal merger a firm could merge with a supplier or a customer. Benefits could include control and costs. A conglomerate merger involves companies with no direct relationship or market penetration.

In the case of a corporate merger, two separate entities join to form one.

This could be where one company absorbs another or where 2 or more companies join to form a new company.

The objectives of corporate mergers are as follows:

  • Increased market share
  • Economies of scale
  • Cost reduction
  • Improvements in technology
  • Improved R & D
  • Bulk buying
  • Financial benefits such as lower rates of interest
  • Lifeline for struggling companies

There are also potential negatives when it comes to corporate mergers.

These include:

  • Monopolies and inflated prices
  • Cultural and personal clashes can create conflict situations
  • Miscalculations in valuations and projections can lead to the failure of a merger
  • Job losses
Transworld M&A have many years in Corporate Mergers and can help you navigate the risky waters.

Their business advisors are skilled in various relevant fields such as accounting, financial management as well as negotiations and related legal matters. They know how put forward the right proposals and gain the trust and respect of the other parties.

If you need help with Corporate Mergers or Acquisitions, then you need look no further than Transworld M&A.