Q ] Factors for growth of M & A Activity

With mergers and acquisitions, growth occurs by finding complementary alliances among the competition. Although an ample upside is associated with a successful merger or acquisition, potential risks dictate prudence before companies tie the knot. 1) Strategic Fit Companies operating in the same sector must have some degree of alignment in terms of competitive situation, strategy, organizational culture and leadership style. Greater overlap of these elements between organizations creates a more conducive environment for merging two separate companies into a single entity. 2) Market Share & Branding Fierce protectiveness over market share exists between competitors operating within the same sector. When the opportunity to combine operations presents itself, however, company leaders see a probable growth in market share on the horizon. Whether combining operations turns out to be as profitable as hopeful numbers project, however, depends on how well the merger or acquisition is executed. Included here is the idea of branding and how customers perceive the new, larger company and whether customer loyalty transfers to the new entity. 3) Strengths & Weaknesses Understanding the strengths and weaknesses each company brings to the table is another element in determining the viability of potential mergers and acquisitions. Big companies with large balance sheets and little debt make an attractive partner in terms of capital. Smaller companies with nimble management might be eyed for ingenuity prowess. 4) M&A Motivation During the deal-making process, the motivation of both the buyer and seller can affect the financials. A buyer going into negotiations who is particularly convinced of a company's value, for instance, is likely willing to pay a higher price to close the deal, or an especially motivated seller might settle for a lower price as a means of getting the deal done. (5) Project manager’s competence and commitment, (5) Communication and information sharing and exchange, (6) Project plan development, (7) M&A advisory firm’s resource planning, (8) Time management and tight secrecy, (9) Price evaluation and financing scheme, and (10) Risk management (11) Exchange rate (12) Interest rate (13) Stock prices

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