Theory of Mergers and Acquisitions

The theory of mergers and acquisitions (M&A) explains how companies combine or acquire others to grow, gain competitive advantages, or improve efficiency. Mergers occur when two companies join to become one, while acquisitions involve one company purchasing another. These strategies aim to enhance market share, access new markets, or achieve cost savings. Successful M&A activities rely on careful planning, valuation, and integration to realize the expected benefits, often driven by the idea that the combined company will perform better than the separate entities. Overall, M&A is a strategic tool for companies seeking growth and competitiveness in dynamic markets.