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M&A is an important strategic option for companies to leverage in order to make necessary leaps in the competitive marketplace. M&A includes mergers, acquisitions, joint ventures, or divestitures. While M&A carries risks and many deals fail, it can help companies achieve higher market share, broader customer base, and access to new technology and distribution channels. M&A is not only about acquisitions but also divestitures, which should be considered not just for underperforming activities but when new owners can add more value.

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Regine Consuelo
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76 views1 page

Finman

M&A is an important strategic option for companies to leverage in order to make necessary leaps in the competitive marketplace. M&A includes mergers, acquisitions, joint ventures, or divestitures. While M&A carries risks and many deals fail, it can help companies achieve higher market share, broader customer base, and access to new technology and distribution channels. M&A is not only about acquisitions but also divestitures, which should be considered not just for underperforming activities but when new owners can add more value.

Uploaded by

Regine Consuelo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Consuelo, Regine C.

 M&A is an important strategic option that companies can leverage to make necessary
leaps in the competitive marketplace

M&A is a mergers, acquisitions, joint ventures or a divestitures. It is facilitated by


exceptionally low costs of financing and abundant liquidity, which are the result of unorthodox
measures central banks have taken to revive economic growth. So, the M&A has become an
important instrument for growth because of the organic revenue growth of many companies is
in the low single digits.

M&A is very risky and many deaks fail, sometimes bringing companies to the brink of failure
but it can help also in obtaining a higher marjet share abd a broader customer base, and gain
access to new technology, products abd distribution channels. Mostly of tge companies mergers
and acquisutuons are irregular events for which they lack capabilities and processes.

M&A is not only about acquisitions, but also about divestitures. Divestitures should not only
be considered for poorly performing activities, but also when new owners can add more value
to a business. Typically a lot of emotion has to be overcome before a divestment decisions can
be made because companies have natural tendenct to pursye growth, even when growth is not
creating value. It is therefore crucial that a review of the business portfolio to identify
candidates for divestitures is performed in a structured and timely fashion. Preparing for
divestitures can take from several months up to one or even two years.

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