Merge is a Voluntary combination of two firms on roughly equal terms into one new legal entity. Mergers are effected by exchange of the pre-merger stock (shares) for the stock of the new firm. Owners of each pre-merger firm continue as owners, and the resources of the merging entities are pooled for the benefit of the new entity. If the merged entities were competitors, the merger is called horizontal integration, if they were supplier or customer of one another, it is called vertical integration. (BusinessDictionary.com. 2011)
According with this definition and using the example of companies like Almagran and Almacenar there are many more positives than negatives aspects to which companies face in this kind of process.
On the one hand the positive aspects are:
- Combine both knowledge and capital to expand operations
- Cover a larger market share
- Offers of integral services tailored to customers
- Greater support for their customers
On the other hand the negative aspects are:
- Communication problems between pre-merger companies
- The adaptation process can be difficult and slow
- The image of the company may be affected
- Lack of autonomy of any of the companies
AlziraSalama, Wayne Holland, Gerald Vinten, (2003) "Challenges and opportunities in mergers and acquisitions: three international case studies –Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", Journal of European Industrial Training, Vol. 27 Iss: 6, pp.313 –321
No comments:
Post a Comment