Merger Strategies

Merger StrategiesA merger takes place when; two or more organizations merge together and their operations are absorbed by a news organization.

A merger is a strategy through which two or more organizations agree to integrate their operations on a relatively co-equal basis because they have resources and capabilities that together may create a stronger competitive advantage.

In the business world, a merger is a combination of two or more companies. When combined together, a new company is created.

After having been merged, the companies lose their independent identities. The partnering-companies are dissolved.

Their assets and liabilities are combined. New shares/stocks are issued for the new company created after the merger.

Thenceforth, they can never operate a business with their previous names independently. A merger can take place among organizations within the same country or among organizations across the national borders.

An example of an international merger is the deal between Reckitt & Coleman of the U.K. and Benckiser of the Netherlands.

Very recently (August 29, 2011) two leading Greek Banks – Eurobank and Alpha Bank – merged together to provide a vital confidence boost to the debt-hit Greece’s banking system. Eurobank and Alpha Bank are respectively the second and third Greek banks in terms of J assets and liabilities.