Inorganic Growth (Mergers & Takeovers)

• What is a merger?


  • A merger is a legal deal to bring 2 businesses together under one board of directors
  • Currys + PC World = Currys PC World
• What is a take-over?


  • Also known as acquisition, this is a legal deal where one larger business purchases a smaller one, or buys another failing business
  • Poundland taking over Wilkos
• Reasons for Mergers & Takeovers


  • Tactical: Attempt to ensure increased market share, Access to technology/staff or intellectual property.
  • Strategic: Access to new markets, Improved distribution networks, Improved brand awareness.
• What is a Friendly Takeover?


  • A business may be struggling with cash flow problems and invite a takeover from a stronger business - known as a "white knight" as they come and rescue the struggling business.
• What is a Hostile Takeover?


  • The board of directors will try and resist the takeover, but if another business gets 51% of the shares they can takeover.
• What is Horizontal Integration?


  • Business operating in the same sector merges or takeover another business in the same sector.
• What is the CMA?


  • Competition & Market Authority
• What is Vertical Integration?


  • It's when one business in one sector takes over or merges with a business in another sector or part of supply chain.