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The Role Of M&a Advisory Firms In Merging And Acquiring Companies

By Author: Aastha Kapoor
Total Articles: 28

Merger and Acquisition companies usually involve restructuring 2 companies based on the type of purpose, type of control, goals and objectives to be achieved with a collaboration. A brief about how an M&A advisory firm facilitates the joining of two companies to make it efficiently function as one is been explained below.

Let us now understand in simple terms of how Acquisition and Merger works. Merger happens when two or more companies infuse as one and benefits from the process of being a single entity. Acquisition works on the principle of being called as an ‘extreme case of merger’. This scenario transpires when one organization takes over the other and runs it under their own banner.

Mergers and acquisitions can be of various forms. We present to you some of the forms. Low touch ownership, horizontal merger, merger under equals, vertical merger, take over, conglomerate, and reverse merger are some of the types of mergers.

In a low touch ownership acquisition, it is made sure that even though the company has been bought, it is ensured that the old policies and principles are been preserved especially when the company is functioning very well. In merger and equals, two organizations with considerable assets are being combined with respect to product and service perspective and provide better productivity. In a take over the acquisition, most of the doings of the previous company bought over are being undone and they all are been dissolved into the organization that has purchased the company.

The benefits of combining companies through M&A is usually associated with the efficiency and the capability it provides to better the already existing business. Apart from this reason, some of the benefits can be, reduced labour costs, acquiring better and smart resources to accomplish tasks, compounded financial resources, an increase in share market value, and increased power of distribution. However, advantages bring along disadvantages too. The legal formalities can add up to a huge cost to acquire a company. Also, the merger and acquisition can have a bad publicity as a result of which the stock prices for the company might fall.

The major aim of M&A advisory firms is to strategically increase a company’s size through service area, talent, and expanded customer base. However, the procedures need to be carried out with great care. As the process involves time and money the business must be sure before getting into M&A. You could take advice from a reputed firm like JM Financial. The firm specializes in a various spectrum of businesses that range from Investment Banking, Equity, Debt, Commodity Sales and Trading, Wealth Management, Portfolio Management Services, Asset Management, Alternative Asset Management, Financing and Lending, Housing Finance and Distressed Asset Management. Their impeccable services have garnered JM Financial a huge satisfied customer base. Kindly do visit their website and see the various portfolios in the offering.

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