However, mergers are rarely a true merger of equals. More often, a company indirectly buys another business and allows the target company to characterize it as a merger to maintain its reputation. If an acquisition is made in this way, the purchase entity can acquire the target company with all the shares, all the cash or a combination of the two. Mark L. Sirower is a business development consultant with the Boston Consulting Group in New York and a visiting professor for mergers and acquisitions at New York University`s Leonard N. Stern School of Business. He is the author of The Synergy Trap: How Companies Lose the Acquisition Game (Free Press, 1997). When two companies merge, they are often similar in size, size and capacity. As a result, this type of merger is often referred to as “mergers of equals.” The main reasons for mergers are the acquisition of market share, reduced competition, improved costs and efficiency, and increased profits. Cash payment. These transactions are generally referred to as acquisitions, not mergers, since the shareholders of the target company are removed from the image and the objective is placed under the (indirect) control of the bidder`s shareholders. In corporate financing, mergers and acquisitions (M-A) are transactions that transfer or consolidate ownership of one entity, another entity or their business units with other entities. As an aspect of strategic management, M-A can enable companies to grow or reduce them and change the nature of their business or competitive position.
The Great Merger Movement was a predominantly American commercial phenomenon, which occurred from 1895 to 1905. During this period, small companies with a small market share consolidated with similar companies to form large, powerful institutions that dominated their markets, such as the Standard Oil Company, which controlled nearly 90% of the global oil industry at its level. It is estimated that more than 1,800 of these companies have disappeared in consolidation operations, many of which have acquired significant shares in the markets in which they were active. The vehicle used was so-called trusts. In 1900, the value of companies acquired through mergers accounted for 20% of GDP. In 1990, this figure was only 3% and 10-11% of GDP between 1998 and 2000. Companies such as DuPont, U.S. Steel and General Electric, which merged during the major merger movement, were able to maintain their dominance in their respective sectors until 1929 and, in some cases, to this day, due to the increasing technological advances in their products, their patents and the reputation of their brands by their customers. There were also other companies that had the largest market share in 1905, but did not have the competitive advantages of companies such as DuPont and General Electric.
