Many corporate acquisitions result in losses to the acquiring firms' stockholders. Accordingly, why do firms purchase other corporations? Are they simply paying too much for the acquired corporation?© BrainMass Inc. brainmass.com June 3, 2020, 6:49 pm ad1c9bdddf
Firms purchase other corporation either to obtain vertical integration by acquiring companies which supply raw material or inputs/resources for their products or services or to obtain horizontal integration by acquiring companies producing similar goods and services. Therefore, the purpose of acquisition is to either reduce costs, ...
Why do firms purchase other corporations? Are they simply paying too much for the acquired corporation?