Why Do Companies Combine?

Companies merge to expand their market share, diversify products, reduce risk and competition, and increase profits. Common types of company mergers include conglomerates, horizontal mergers, vertical mergers, market extensions and product extensions.

What is the purpose of a merger?

Mergers are most commonly done to gain market share, reduce costs of operations, expand to new territories, unite common products, grow revenues, and increase profits—all of which should benefit the firms' shareholders.

What are the reasons for amalgamation?

Amalgamation is a way to acquire cash resources, eliminate competition, save on taxes, or influence the economies of large-scale operations. Amalgamation may also increase shareholder value, reduce risk by diversification, improve managerial effectiveness, and help achieve company growth and financial gain.