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Company_Structures

Corporate Alliances and Acquisitions

As business become increasingly competitive, many companies have to strengthen their operations to remain profitable. There are several ways to achieve it.

Joint venture

A joint venture is a strategic alliance where two or more people or companies agree to contribute goods, services and/or capital to a common commercial enterprise. This type of deal allows the partners to combine their strengths in one specific area.

Merger

A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its identity, while the acquired firm ceases to exist. A majority vote of shareholders is generally required to approve a merger.

Companies merge for many reasons, for example, to increase market share and cut costs in certain areas, such as research and development.

Acquisition

An acquisition is the purchase of one business or company by another company or other business entity. Consolidation occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently. Acquisitions are divided into "private" and "public" acquisitions. An additional dimension or categorization consists of whether an acquisition is friendly or hostile.