3.2.2 - mergers and takeovers

takeover/aquisition

a legal deal where a business purchases another one

merger

a legal deal to bring two businesses together under 1 board of directors

strategic reasons for takeovers/mergers

increases profitability, instant market share, increase market abroad, access to new markets, improved distribution networks, improved brand awareness

tactical reasons for takeovers/mergers

cash injection, eliminate rival, access to patents/technology, attempt to ensure increased market share, access to new staff

synergy

two businesses that are better together than apart

hostile takeover

another business buying 51% of shares of a business to gain control

primary sector

sourcing products/parts of products

secondary sector

manufacturing

tertiary sector

selling to the consumer

horizontal integration

merging/takeover of a business in the same market

vertical integration

a business taking over/merging with a part of the supply chain