A few successful acquisition examples to motivate CEOs

A few successful acquisition examples to motivate CEOs

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Below is a brief guide to knowing the different acquisition possibilities and strategies that business leaders can select from

Prior to diving into the ins and outs of acquisition strategies, the 1st thing to do is have a firm 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 business's shares to gain control of that firm. Generally-speaking, there are about 3 types of acquisitions that are most popular in the business world, as business people like Robert F. Smith would likely recognize. One of the most prevalent types of acquisition strategies in business is known as a horizontal acquisition. So, what does this imply? Basically, a horizontal acquisition entails one company acquiring another business that is in the very same market and is performing at a similar level. Both businesses are essentially part of the exact same sector and are on an equal playing field, whether that's in production, financing and business, or agriculture etc. Typically, they could even be considered 'rivals' with one another. In general, the primary benefit of a horizontal acquisition is the increased possibility of increasing a business's client base and market share, along with opening-up the possibility to help a company broaden its reach into new markets.

Lots of people think that the acquisition process steps are constantly the same, whatever the company is. Nevertheless, this is a standard misconception because there are actually over 3 types of acquisitions in business, all of which include their own procedures and strategies. As business people like Arvid Trolle would likely verify, one of the most frequently-seen acquisition strategies is known as a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one company acquires another company that is in a completely different position on the supply chain. For example, the acquirer company may be higher on the supply chain but opt to acquire a firm that is involved in a vital part of their business functions. On the whole, the appeal of vertical acquisitions is that they can generate new income streams for the businesses, in addition to lower costs of production and streamline operations.

Among the countless types of acquisition strategies, there are 2 that individuals usually tend to confuse with each other, maybe because of the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are two rather independent strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in totally unrelated industries or engaged in different endeavors. There have been many successful acquisition examples in business that have included 2 starkly different firms with no overlapping operations. Generally, the goal of this technique is diversification. For example, in a scenario where one service or product is struggling in the current market, firms that also own a diverse variety of other products and services often tend to be a lot more stable. On the other hand, a congeneric acquisition is when the acquiring firm and the acquired business are part of a comparable market and sell to the same sort of client but have slightly different service or products. One of the major reasons why firms might opt to do this kind of acquisition is to simply increase its product lines, as business individuals like Marc Rowan would likely verify.