Several successful acquisition examples to inspire CEOs

Several successful acquisition examples to inspire CEOs

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Below is a brief overview to understanding the different acquisition solutions and strategies that business leaders can select from

Amongst the numerous types of acquisition strategies, there are two that individuals commonly tend to confuse with each other, perhaps because of the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are 2 really independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in entirely unrelated industries or engaged in separate activities. There have been numerous successful acquisition examples in business that have involved two starkly different firms with no overlapping operations. Normally, the goal of this technique is diversification. As an example, in a scenario where one product and services is struggling in the current market, businesses that also possess a diverse variety of additional product or services often tend to be far more secure. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired business are part of a similar industry and sell to the same type of consumer but have relatively different service or products. Among the primary reasons why companies might opt to do this sort of acquisition is to simply broaden its product lines, as business people like Marc Rowan would likely validate.

Before diving into the ins and outs of acquisition strategies, the 1st thing to do is have a solid understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one firm purchases either the majority, or all of another business's shares to gain control of that company. Generally-speaking, there are approximately 3 types of acquisitions that are most typical in the business realm, as business individuals like Robert F. Smith would likely recognize. One of the most common types of acquisition strategies in business is called a horizontal acquisition. So, what does this indicate? Essentially, a horizontal acquisition entails one company acquiring an additional firm that is in the exact same market and is performing at a similar level. Both companies are primarily part of the exact same industry and are on a level playing field, whether that's in manufacturing, financing and business, or agriculture etc. Usually, they may even be considered 'rivals' with one another. Overall, the primary benefit of a horizontal acquisition is the increased capacity of increasing a business's consumer base and market share, in addition to opening-up the possibility to help a business expand its reach into new markets.

Many individuals assume that the acquisition process steps are constantly the same, no matter what the business is. Nonetheless, this is a frequent misconception due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their own operations and approaches. As business people like Arvid Trolle would likely verify, among the most frequently-seen acquisition strategies is referred to as a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another company that is in a totally different place on the supply chain. As an example, the acquirer company may be higher on the supply chain but opt to acquire a company that is involved in an essential part of their business procedures. On the whole, the beauty of vertical acquisitions is that they can bring in new earnings streams for the businesses, along with decrease prices of production and streamline operations.