5 Benefits of Mergers and Acquisitions

5 Benefits of Mergers and Acquisitions

Mergers and acquisitions are the terms which are often used in the business dimension. Although these words are used as  complementary actions, their meaning and implementation is quite different.

A merger is the process when 2 organizations combine their resources, technology, capital , name and products due to corporate reasons.  An acquisition simply means taking over. For instance, if a company buys majority shares of another company. The control of the latter is transferred to the former. The majority share means purchasing 51% or more than 51% shares of a company. Mergers are usually carried out in mutual
consensus and the permission of both the companies. However, an acquisition may take place with the target company’s assent or  dissent. 

That being said, merger and acquisition are two complex processes. It is always wise to hire a professional law firm or lawyer to carry out the steps that are involved in the process. Take a look at the top 5 benefits of Mergers and Acquisitions that you need to know to make the next big move in your business.


1. Access to Advanced Technology

Technology is an integrated factor of a business. We create products and services through the utilization of technology which is created with years of research and experimentation. However, some countries bring in new technologies in their environment at a rapid pace while others lack behind and their technology becomes obsolete. In such situations , a company can greatly benefit by merging with a company which has acquired a good technology introduction in it’s working. One such example can be the merger of Maruti Udyog with Japanese company Suzuki in 1982.

2. Economies Of Scope

Mergers and acquisitions help expand the scope of the business beyond the typical boundaries . Organic growth is a priority factor in a business but M&A are the catalyst for boosting the gains of your company. Through M&A companies are able to unlock a diversified client base and sell their products and services to the customers of both the companies that are involved.

3. Tax Benefits

It is a well known fact that a government tends to implement tax cuts when a merger and acquisition is carried out. Taxes which are paid in bulk often drain out the availability of funds in companies, this action can act as a cash injection for the companies involved.

4. Access To Talent

Recruiting is a tedious process which requires you to invest a large share of your time and effort to find the most suitable candidates for your company. Since, an organization is an amalgam of people of various niches and skills, it is often a predicament to find the most ideal candidate for every post. In such cases, M&A acts as a source of introducing fresh talent as well as an experienced workforce for your company. By merging the companies , employees are also merged to carry out operations for the firms.

5. Tackling Competitive Forces

By combining the resources, workforce, capital, products and services and skills . M&A leads to the creation of an ideal organization. This not only makes it easier to function but also helps counter the competitors from both sides and gain qualitative as well as quantitative advantage over the others. It helps you to succeed in the objectives at an enhanced pace and overcome the hurdles in your business.


As witnessed from the above points, it is evident that mergers and acquisitions are a great way to boost the growth of any business. What’s more? If you conduct the deal through the expertise of a professional law firm , you can acquire these benefits and more from your deal. It requires meticulously crafted strategies and arguments to carry out this move. 

For further information, contact our team at Vidhinyas or comment your queries below.
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