Several successful acquisition examples to inspire CEOs

Several successful acquisition examples to inspire CEOs

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Business acquisitions can be a complicated procedure; here are the various approaches that business leaders employ

Many people presume that the acquisition process steps are always the same, regardless of what the company is. Nonetheless, this is a standard misunderstanding due to the fact that there are actually over 3 types of acquisitions in business, all of which include their very own procedures and approaches. As business people like Arvid Trolle would likely validate, one of the most frequently-seen acquisition methods is referred to as a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another firm that is in a completely different place on the supply chain. For instance, the acquirer firm might be higher on the supply chain but decide to acquire a firm that is involved in an essential part of their business functions. Generally, the appeal of vertical acquisitions is that they can bring in brand-new income streams for the businesses, in addition to decrease expenses of manufacturing and streamline operations.

Amongst the several types of acquisition strategies, there are 2 that people commonly tend to confuse with each other, possibly as a result of the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are 2 very distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in totally unconnected markets or engaged in different activities. There have been several successful acquisition examples in business that have involved 2 starkly different businesses with no overlapping operations. Normally, the aim of this technique is diversification. For instance, in a scenario where one services or product is struggling in the current market, firms that also possess a diverse range of other product or services often tend to be more steady. On the other hand, a congeneric acquisition is when the acquiring business and the acquired business belong to a similar market and sell to the same type of client but have relatively different products or services. Among the major reasons why companies may choose to do this sort of acquisition is to simply expand its product lines, as business individuals like Marc Rowan would likely confirm.

Prior to diving into the ins and outs of acquisition strategies, the initial thing to do is have a solid understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one business purchases either the majority, or all of another business's shares to gain control of that firm. Generally-speaking, there are approximately 3 types of acquisitions that are most common in the business realm, as business people like Robert F. Smith would likely understand. Among the most standard types of acquisition strategies in business is known as a horizontal acquisition. So, what does this imply? Essentially, a horizontal acquisition involves one company acquiring an additional business that is in the exact same market and is performing at a similar level. The two firms are generally part of the exact same market and are on a level playing field, whether that's in manufacturing, finance and business, or agriculture etc. Typically, they may even be considered 'competitors' with one another. In general, the primary advantage of a horizontal acquisition is the increased potential of increasing a company's customer base and market share, as well as opening-up the opportunity to help a firm expand its reach into new markets.