3.2.2

• What is a merger?


  When two or more businesses combine to form a new entity.
• What is a takeover (acquisition)?


  When one business buys another, either with consent or through a hostile bid.
• What is horizontal integration?


  It occurs when two businesses at the same stage of production merge.
• What is vertical integration?


  It involves companies at different stages of production merging.
• What are some reasons for mergers and takeovers?


  • Gaining market share
  • Accessing technology or patents
  • Achieving rapid growth
  • Improving profitability
• What did the 2016 KPMG survey reveal about motivations for mergers and acquisitions?


  Market expansion and access to new resources were key drivers.
• What are some risks associated with mergers and takeovers?


  • Regulatory intervention
  • Culture clashes
  • High costs
• What are some rewards of mergers and takeovers?


  • Rapid growth
  • Access to resources
  • Profit increases
• What are the challenges of rapid growth following a merger or acquisition?


  • Drain on resources
  • Coping with change
  • Loss of control
  • Alienation of customers