The global wave of mergers & acquisitions (M&A) seem to penetrate the corporate culture with an intense measure of hope. Business solutions today see mergers & acquisitions as a way to overcome liquidating fears and solidify portfolios in emerging markets. However, the downturn of some mergers & acquisitions in recent times have also sparked caution to all stakeholders – startups, entrepreneurs, corporate, shareholders and consumers alike.
But, the pinnacle of success to most companies will inevitably require some form of an acquisition or a merger to strategically position themselves as the mergers & acquisitions trend evolves steadily in most business operations today.
Just today, some of the world’s most powerful companies announced their willingness to some decisive mergers while others showed their readiness to acquire strategic companies in order to compete vigorously.
New Trends in Mergers & Acquisitions
Amazon.com is reported to be in talks to buy the online luxury retailer Net-a-porter. This could be the biggest acquisition for Amazon if it is able to influence discussions.
The US energy firm Chevron, is also ready to sell its entire stake in Caltex Australia Ltd for about $3.58 billion. This will mean Chevron’s move out from the Australian refiner after almost 40 years as falling prices in oil and high operating costs hurt profit margins.
Goldman Sacks and KKR relinquished their remaining 13.9 stake in the German forklift truck builder Kion, at $41 a share.
In Africa, Kenya’s Centum Investment sealed a deal with the majority owners of sisal grower Rea Vipingo after prolonged takeover battle for the ownership of the agriculture company.
Whilst in South Korea, Hyundai Steel announced that all things being equal in deliberations it is willing to merge with its steelmaking affiliate Hyundai Hysco.
Palpable Perks in Mergers & Acquisitions
These trends in mergers & acquisitions occurring quickly in recent times bring to question the significance or importance of the movement.
Obviously, it is a smart move for companies which are in need of investment capital to lucratively assess funds or valuable assets through mergers or acquisitions. This way, they will be able to acquire already made production or distribution facilities much less the cost of building it anew.
In accessing a wide customer base, it has become so very important for advocate companies to also increase market shares by utilizing their target companies profitable systems for residual profits once a deal is reached.
And obtaining experienced staff and additional skills by merging or acquiring a firm gives a great competitive edge to buyers and sellers. This helps reduce cost and maximizes profits.
There are indeed many other benefits of mergers & acquisitions. But CEIimages is of the view that while these trends seek to revolutionize industries, M&A’s should not be used to harm consumers. Neither should a takeover become insensitive to shareholders and all stakeholders of a business.
“Companies should not have a singular view of profitability”, says Howard Schultz, ” There needs to be a balance between commerce and social responsibility. The companies that are authentic about it will wind up as the companies that make more money”.
If these mergers & acquisitions could explore some wisdom from the playbook of social entrepreneurship, there will indeed be a balance between commerce and social responsibility. And any company which considers a merger or an acquisition will also consider the plight of workers and the society in which it operates.