External Influences

Question 1

What is a merger?

Answer 1

Combination of 2 companies into a single legal entity, often to achieve synergies & enhance market shares

Question 2

What can be the reasons behind a merger?

Answer 2

1. Economies of scale
2. Market power
3. Diversification
4. Access to resources

Question 3

What are the advantages to a merger?

Answer 3

• increase revenue potential
• cost savings & operational efficiencies
• improve innovation through combined resources

Question 4

What are the disadvantages to a merger?

Answer 4

• potential job loss and redundancy
• culture clash between the companies
• regulatory scrutiny and potential legal challenges