Mergers & acquisitions are and have been largely beneficial to a huge amount of companies over the years, both small businesses and large corporations! Some examples of big merger and acquisition deals that caused ripples in the international business world is the Disney and Pixar acquisition. This was a deal done back in 2006 for $7.6 billion, making billions for Disney with the release of movies such as WALL-E and Toy Story 3.
However, Mergers & acquisitions have proven to be a great way to diversify and expand your own small business, whether you are looking to buy out a successful competitor or merge with a company with the intent to generate additional income for both parties involved. One of the biggest myths in business is that mergers & acquisitions are always something that only very successful businesses can do due to the cost of this. Small companies can still carry out Mergers & acquisitions, the deal might be a little more difficult to do in some cases but if there is common interest between both companies and a clear way as to why the deal will benefit both parties most of the time there is a way to get the deal done!
Mergers
Mergers are when two or more companies sign a deal to combine the services that they both provide. These have had examples that have been both very successful and very unsuccessful. If you are running a business and you have another company approach you and offering the prospect of a merger, it is crucial that you consult a trusted business advisor to see if the merger would be beneficial for both parties.
An example of a merger that has been very successful in big business is the merger between Vodafone and Mannesmann that was worth around $200 billion in 2000!
Acquisitions
Slightly different from mergers, acquisitions are when either you are buying out a fellow competitor’s business or you are being bought out by a competitor. It is crucial that before acquiring a business through due diligence is carried out so you know exactly what you are buying into.
If you are the owner of the business that is being bought out by a fellow company, it is important that you get your business valued by an independent neutral party to ensure that you are getting a fair price for your company.
