3.2.2 Mergers and takeovers

Question 1

What are the reasons for mergers/takeovers?

4

Answer 1

• Quick growth
• Cost synergies (2 coming together - EOS)
• Diversification (>dependence on 1 product/customer)
• Market power (>comp, oligopoly), ^prices

Question 2

What are the cons of mergers/takeovers?

3

Answer 2

• Conflict of management style, culture
• Poor comm (^layers)
• Questionable motives