Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorption, a merger, a tender offer or a hostile takeover. As an aspect of strategic management, M&A can allow enterprises to grow or downsize, and change the nature of their business or competitive position.
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👉 Merger and acquisition in the context of Consolidation (business)
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes. Under the Halsbury's Laws of England, amalgamation is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company or the transfer of one or more companies to an existing company".
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Merger and acquisition in the context of Conglomerate (company)
A conglomerate (/kəŋˈɡlɒmərət/) is a type of multi-industry company that consists of several different and unrelated business entities that operate in various industries. A conglomerate usually is a parent company that owns and controls many subsidiaries, which are legally independent but financially and strategically dependent on the parent company. Conglomerates are often large and multinational corporations that have a global presence and a diversified portfolio of products and services. Conglomerates can be formed by merger and acquisitions, spin-offs, or joint ventures.
Conglomerates are common in many countries and sectors, such as media, banking, energy, mining, manufacturing, retail, defense, and transportation. This type of organization aims to achieve economies of scale, market power, risk diversification, and financial synergy. However, they also face challenges such as complexity, bureaucracy, agency problems, and regulation.