To stay competitive, companies must acquire more assets and new technology in today’s fiercely competitive business environment. This is why mergers and acquisitions have been so frequent this year. One of the most frequent reasons a company will engage in M&A involves financial resources. M&A involves a company buying another company with cash or debt assumption, stock, or a m&a market state combination thereof. The money that the buyer acquires is used to expand its operations or to invest in new product lines. It can also help it gain access to distribution channels that it wouldn’t be able reach on its own.
Other motives for M&A include the growth of market share, strengthening brand image and diversifying the product offerings. For example, Facebook and other social media giants buy apps that target certain groups of people to increase their users. M&A can lead to cost savings by reducing the size of the company and streamlined processes. Additionally, M&A can allow companies to gain access to new markets quickly and gain tax advantages in the process.
M&A is a potent tool to grow a business but it also has risks. It can lead a company to dominate a market and create Monopolies. M&As typically are subject to government regulation. Furthermore, M&As are intimately entwined with geopolitical relationships. The study of M&As using a cultural political economic lens can provide valuable insight into how corporate power is negotiated and transferred in changing economic geopolitics.