Our Palm Springs mergers and acquisitions firm understands how important it is to complete a merger successfully. Let us briefly explain what a merger is about so you are familiar with the idea.
Why Merge Companies
Mergers are a strategy for survival. With the goal being long-term revenue gains, two companies or more team up to make that dream a reality. A successful merger starts with negotiating a good deal between parties; it ends with satisfying everyone’s demands. Company shareholders get a piece of the merged result and maintain a presence toward the new company’s success.
The voluntary process exchanges cash or stock for the company while the new name usually combines the previous companies’ names. Reasons for the merger include but not limited to finances, competition, and management.
Mergers consist of the following classifications:
• Horizontal merger – two or more merging companies in the same industry selling the same or similar products and services
• Vertical merger – two or more merging companies in the same industry working in two different departments
• Congener merger – two or more merging companies in the same industry but doesn’t share the same circles, network, customer, or business partner
• Conglomerate merger – a merger between two different industries
• Reverse merger – a public merger without an IPO
• Accretive merger – a merger resulting in increased earnings per share from the acquired company
• Dilutive merger – the polar opposite of accretive mergers – the earnings per share decrease when the acquired company merges.