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Do think mergers and acquisitions are a good thing

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A merger or acquisition of two companies can have its advantages and disadvantages. Some of the advantages of a merger may include the enhanced performance of the two merged companies, their financial gains, and the overall shareholders long-term value; improves the purchasing power to help the company negotiate bulk orders that lead to cost efficiency. The merger also combines the talent of both companies, providing better opportunities for sales.

  • The disadvantages of a merger or acquisition may include the reduction in competition due to merger, which causes increase in prices; loss of jobs may be the result of a merger, or an acquired company may be shut down due to poor performance. Also, when there is a culture difference between the two companies, conflict may arise, making it difficult to work together.
  • A merger or acquisition needs to be analyzed, advantages versus disadvantages need to be weighed before moving forward with a merge or acquisition. A company can benefit from a merge, but it can also hurt the company is the company it is merging with has so much debt that it makes the company go under.

Question 1: From the non-financial accounting perspective, do you think mergers and acquisitions are a good thing or a bad thing and why?

Reference no: EM132682957

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