Companies buy other companies for different reasons. They may sometimes appear to be natural acquisitions, logical or strategic purchases, but there is always a reason.
Mergers or acquisitions are an excellent way for the companies that pursue growth and they may include the following reasons, among others:

• Greater market share
• Accelerate the sales of a category in the sector
• Take advantage of its installed capacity
• Penetrate a new segment or different category
• Offset any deceleration in some of its categories and/or products
• For the desire to include new products in the portfolio
• For a change in the business strategy
• Eliminate an uncomfortable competitor
• Access new technologies
• Position itself before a new public and speak to a new audience
• When a structure exists to generate a competitive edge
• For a new business vision
• So that through that acquisition, more expansion and a new market niche are accessible

In my opinion, when the financial resources are available, acquiring an ongoing company or business may be a smart, interesting, and maybe the most appealing way to enter the business world. An ongoing business can be an excellent way to cover new paths or to achieve greater expansion.

All businesses have growth in mind, but this must be done in an organized and strategic way. Organic and non-organic growth demand analysis, studies, preparation, and in-depth knowledge of the sector, with clear and well-defined vision, and full understanding of the resulting consequences.

It is worth mentioning that we are referring to complex processes that demand a lot of work, effort, and dedication, because all the processes must be documented in the time and form required.

The triggers and drivers of the potential transaction must be very clear in our mind. These are ventures that must be approached very carefully and in a highly organized way to achieve the best negotiations focused on profitable results.

In short, some companies have their checkbooks ready to explore the purchase and sale opportunities, with the idea of making smart use of their existing resources.

Date
 26/03/19