A number of successful acquisition examples to inspire CEOs

A number of successful acquisition examples to inspire CEOs

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When 2 companies undergo an acquisition, it is likely that they will do one of the following approaches

Many people think that the acquisition process steps are constantly the same, regardless of what the company is. However, this is a common false impression due to the fact that there are actually over 3 types of acquisitions in business, all of which include their own operations and strategies. As business people like Arvid Trolle would likely validate, among the most frequently-seen acquisition strategies is called 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 totally different position on the supply chain. As an example, the acquirer business may be higher on the supply chain but decide to acquire a firm that is involved in a crucial part of their business operations. On the whole, the beauty of vertical acquisitions is that they can bring in brand-new income streams for the businesses, along with lower prices of production and streamline operations.

Among the numerous types of acquisition strategies, there are 2 that people have a tendency to confuse with each other, probably because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two rather distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unconnected industries or engaged in different activities. There have actually been many successful acquisition examples in business that have included 2 starkly different firms without any overlapping operations. Usually, the goal of this strategy is diversification. For instance, in a scenario where one services or product is struggling in the current market, businesses that also own a diverse variety of additional products and services have a tendency to be more steady. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired company are part of a comparable sector and sell to the same type of client but have relatively different products or services. One of the primary reasons why businesses might choose to do this sort of acquisition is to simply increase its product lines, as business people like Marc Rowan would likely validate.

Before diving into the ins and outs of acquisition strategies, the very first thing to do is have a solid understanding on what an acquisition truly is. Not to be mixed-up with a merger, an acquisition is when one company purchases either the majority, or all of another company's shares to gain control of that business. Generally-speaking, there are about 3 types of acquisitions that are most popular in the business sector, as business people like Robert F. Smith would likely recognize. One of the most usual types of acquisition strategies in business is called a horizontal acquisition. So, what does this suggest? Basically, a horizontal acquisition entails one company acquiring another company that is in the 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 production, financing and business, or farming etc. Commonly, they could even be considered 'rivals' with each other. Generally, the major benefit of a horizontal acquisition is the increased capacity of boosting a business's client base and market share, in addition to opening-up the chance to help a business grow its reach into new markets.