Merger and Acquisition Theory

Merger and Acquisition (M&A) Theory explains how and why companies combine or acquire others. Mergers happen when two companies join to create a stronger, more competitive entity, often sharing resources and expertise. Acquisitions involve one company buying another to expand its market, gain new technologies, or improve efficiency. These processes are driven by strategic goals like increasing profits, reducing competition, or entering new markets. The theory considers economic, financial, and managerial factors to evaluate whether M&A will create value or lead to synergies that benefit the combined organization.