Mergers and Acquisitions

Mergers and Acquisitions Benefits You Should Know

Mergers and Acquisitions have their own unique benefits. Find out what they are, and which companies have used this strategy to boost growth.

By teammarquee . January 6, 2023

due diligence in mergers and acquisitions

While mergers and acquisitions may seem a long way down the line for a young company, it’s essential to know more about them, and how they can make their way into the firm’s long-term strategy – something that should already be prepared in advance. While used interchangeably, mergers & acquisitions have two different meanings.

Company mergers occur when two companies consolidate into a new entity with a new ownership and management structure.

Company acquisitions, on the other hand, do not create a new business entity. On the contrary, the small company ceases to exist and becomes part of the larger company.


There are many branches of M&A, namely;

  1. Consolidations: uniting two core businesses and forming a new corporate structure.
  2. Tender Offers: when one company offers to purchase the outstanding stock of the other firm at a specific price rather than the market price.
  3. Acquisition of Assets: buying the assets of another company
  4. Management Acquisitions: company executives purchase a controlling stake in another company, thus taking it private.

The top mergers and acquisitions deals are instrumented by some of the best M&A consulting firms. There is a lot of planning and finesse that go behind mergers & acquisitions strategies that must be set in place to effectively handle a takeover.

Mergers & Acquisitions Strategies

Some of the approaches used by M&A consulting firms are:

  1. Horizontal merger: Horizontal acquisition is when two companies in direct competition with each other sell the same products.
  2. Vertical merger: Between firms operating at different stages of production.
  3. Congeneric mergers: Two businesses that have the same consumer base in different ways.
  4. Market-extension merger: Two companies that sell the same products to different markets.
  5. Product-extension merger: Two companies selling different but related products in the same market.
  6. Conglomeration: Two companies that have no common business interests.


Seeing recent M&A deals on TV, one can’t help but wonder how companies manage to pay off huge sums of money to fund company mergers and company acquisitions. Obviously, there’s a lot of background due diligence that surrounds an M&A deal. Each company would weigh in their options, run an inventory check and then determine the risk-to-reward ratio. With that being said, here are a few ways how companies fund their deals:

  1. Cash
  2. Stock
  3. Debt
  4. A combination of the above.


Now that you’re equipped with this knowledge, we move on to answer the question of how advantageous are M&A deals, and if they are worth the resources used to execute them.

1. Economies of Scale:


  • Increased access to capital,
  • lower costs,
  • better bargaining power.

2. Economies of Scope:

Reduction in production cost of one product because of the production of another related product.

3. Synergies:

The value of combining forces and resources – attacking the market together in contrast with doing it by yourself

4. Opportunistic Value Generation:

Purchasing a company for much lesser than its earning potential – making a substantial ROI.

5. Increased Market Share:

Eating up the market capitalization by effectively killing off competition.

6. Higher Levels of Competition:

The newly synergized firm is ready to take on more challenges now that it’s equipped with better resources.

7. Access to Talent:

Having a wider range of skills to benefit from and having better access to the labour market.

8. Diversification of Risk:

Risk is spread across various operations, and losses incurred from one part of the business will not be hugely disastrous because investments are spread across different markets.

9. Faster Strategy Implementation:

Because of the resources a merged company has at hand, it can achieve its targets in let’s say 5 years compared to a smaller firm that’d take 10.

10. Tax Benefits:

If the buying company purchases a firm that’s in a favourable tax environment, it can benefit from lower costs and lead to direct profitability. It might also be subsidised according to local regulations.

Recent M&A Deals

Since the opportunities presented by M&A deals are plenty, it’s no wonder by companies would prefer to opt for this route. Here are some of the companies that have made blockbuster deals of late:

Mergers in India
S. No. Name of the First CompanyName of the Company Merged withYear in which it was Merged
1Indus TowersBharti Infratel2020
2National Institute of Miners’ Health (NIMH)ICMR – National Institute of Occupational Health (NIOH)2019
3Indiabulls Housing Finance Limited (IBHFL) and Indiabulls Commercial Credit Limited (ICCL)Lakshmi Vilas Bank Limited (LVB)2019
4Bank of BarodaVijaya Bank and Dena Bank2019
5IndusInd BankBharat Financial (SKS Microfinance)2019
6NBFC Capital FirstIDFC Bank2018
7Vodafone IndiaIdea Cellular2018
8TATA SteelThyssenKrupp2018
10State Bank of IndiaBhartiya Mahila Bank, SB of Bikaner and Jaipur, SB of Patiala, SB of Travancore2017
11FlipkartE-bay India2017


Parting Words

Knowledge is powerful. But knowing what to do with that knowledge is even more so. If you want to be in this for the long haul, set a long-term target for your company. Ask yourself how big you want to be. Then ask yourself what it will take for you to get there. M&A is critical to growing exponentially, yes – but how does it fit into your business? You will need the right amount of experience, insight and assistance on your side to ensure that the deal delivers its utmost value. Give the pros a call at +1-213-600-7272.

Marquee Equity

Looking to make your Mergers and Acquisitions process efficient?

Marquee Equity will help you with the experience and knowledge to ensure that your deal delivers its utmost value.

Trusted By:
Related Articles

We optimize & accelerate growth for already great products.


Business Investors Near Me: A Local Perspective

Local investors are the heartbeat of community-driven growth. Beyond funding, they bring insights, connections, and shared values. In the nexus of business and locality, their presence becomes a catalyst, propelling businesses to thrive within the unique tapestry of our local landscape.


It’s the acquisition of a target company by the acquirer by going directly to the target company's shareholders, either by making a tender offer or through a proxy vote.

Look at the economy as a whole. Determine and set your targets. Weigh up your resources. Select your target company. Formulate your takeover plan. Only when all of these answers line up, you will know if it’s both; the right time, and the right plan of action for you to take.

Need a compelling pitch deck and information memorandum?

Our analysts will help you throughout the process.