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When a firm decides to grow its business from within

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Explain three types of mergers that a firm must use to grow its business from within.

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Solution Summary

Companies used mergers and acquisitions as a method to obtain market growth. The success of the legal transactions depends on strategic negotiations.

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Corporations often use mergers and acquisitions as a means of growth within the firm. Most mergers and acquisitions are friendly takeovers which allow for the shareholders and board directors to approval. However, some hostile takeovers whereby management and board of directors disapprove of the mergers and acquisitions.

There is a difference between a merger and an acquisition. A merger transpires when two companies come together to form a new company. In contrast, an acquisition occurs when a company buys another company and absorbs its operations.

Now there are three types of mergers: horizontal, vertical, and conglomerate.
Horizontal mergers comprise companies offering similar products and services to the same type o customers. For example, T-Mobile and Sprint merging for the sole purpose of increasing market shares and revenue. According to Findley & Thurm (2019), T-Mobile completed a $26.5 billion merger with Sprint, a deal that will reduce competition for ...

Solution provided by:
Jennifer Agard, PhD
Education
  • MA, Capella University
  • BA, Empire State College, NY
  • MBA, Empire State College, NY.
  • PhD , Concordia University
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