What are the Different Types of Mergers & Acquisitions

1. What are the Different Types of Mergers & Acquisitions? Mergers and acquisitions always make headlines. Although many people think they know what these transactions are, there are many different types of business transactions that go under the name ‘mergers and acquisitions’. Learn about the different types of Mergers and acquisitions in Washington , why they happen, and the different components of a transaction. Finally, figure out the best way to get organised when preparing for a merger or acquisition. 7 types of mergers and acquisitions 1. Horizontal acquisition Horizontal acquisitions (also known as ‘horizontal mergers’) are the acquisition of market share through integration. Both companies must operate in the same space and offer nearly identical products and services. As the new company grows in size, it will have greater bargaining power and a better competitive position than if the two companies were independent. The largest companies in most industries have achieved or maintained their leading positions through parallel acquisitions. 2. Secure market expansion Market expansion acquisitions are a variation of horizontal acquisitions in which the companies are located in different geographical locations. Ultimately, the goal is still integration, but over a wider region. Cross-border acquisitions are the most common form of market expansion acquisitions and are particularly common in industries such as food retail and retail banking. In these industries, new market entrants are encouraged to make acquisitions rather than start new operations in new geographies. 3. Vertical acquisition Horizontal acquisition describes what happens when one company acquires another company at a different level of the product or value chain, whereas horizontal acquisition describes a company acquiring a competitor operating at the same level of the product chain. Vertical

2. acquisitions occur when a Top Accounting Firm in Chicago that focuses on one of these areas acquires another that focuses on one of the other areas. 4. Integrated acquisition Our consumption patterns are increasingly centred around large corporations that have become experts in acquisitions. Large corporate acquisitions typically occur when a large corporation grows through a series of additional acquisitions with a diverse range of product and service lines, geographies, and industry perspectives. Everyone knows the names of the world's largest consumer goods conglomerates such as Procter & Gamble, Nestlé, GlaxoSmithKline and others. If you think about your product line, it could include everything from pet food to detergents, dairy products to frozen foods. 5. Acquisition of the same kind An integrated acquisition (also known as a 'concentration acquisition' or 'product expansion merger') is a variation of a horizontal acquisition where, instead of having the same product or service line, the two companies involved in the transaction have different products. This is true even if lines and services broadly serve the same market. This overlap between companies creates synergies (when two companies become greater than the sum of their parts). A common example from corporate finance textbooks that illustrates this distinction in a simple way is the acquisition of a wafer manufacturer by an ice cream manufacturer. 6. Reverse acquisition (SPAC) Reverse acquisitions, or ‘SPAC’ (special purpose acquisition company) transactions, have increased over the past five years. In this type of acquisition, a private company purchases a Public company partner in Virginia with the intention of taking it public and avoiding the typically costly IPO process. Depending on how the deal is structured, a reverse takeover can also involve a public company acquiring a private company. However, the ultimate goal is always to bring the newly formed company under the control of a private company and list it publicly. 7. Acquisition

3. In an era where the world's largest companies define talent and intellectual property as capital assets, the acquisition model is a proven way to ensure companies win the race for talent in their industry. This is common in the tech sector, where programmers are so scarce that large tech companies will do almost anything to acquire value-added talent, including acquiring companies. Conclusion In essence, an acquisition is a transaction when one company purchases another. However, as this piece will show you, there are several fundamental forms and objectives that this company may have. In our next essay, we'll focus on the merger phase to help you better understand the phases involved in M&A, from strategy to valuation to integration.