Mergers and Acquisitions

Mergers and acquisitions (M&A) is a significant phrase in the business world. The decision to either merge with another company or acquire a company becomes crucial for several reasons. Beating the newly rising competition or funding requirement to grow a company or to earn profit by selling the company can be a few reasons behind them.

Bottom line

Usually, companies look for M&A keeping their profit in mind. However, there are instances where the companies have failed after mergers and acquisitions—for instance, Quaker Oats and Snapple. Quaker Oats successfully managed the widely famous Gatorade drink and thought of doing the same with Snapple’s bottled teas and juices. In 1994, despite warnings from Wall Street for not overpaying in the deal, the company acquired Snapple at $1.7 billion. It ended up paying 1 billion$ extra, which wasn’t worth the deal. Along with that, the management broke a fundamental law in mergers and acquisitions. Hence, make sure you know how to run the company and bring specific value-added skill sets, expertise to the operation.