There’s a saying in the old days that “two heads are better than one.” This is particularly true in leading m&a software apps for android the world of business mergers and acquisitions (M&A). Joining forces with a rival can help companies realize synergies while also reducing costs through eliminating duplicate roles or systems. However, this type of collaboration comes at a steep price for the M&A process can take anywhere from months to years and is usually extremely labor intensive.

A merger and acquisition is a contract that combines the liabilities and assets of two distinct entities to form one entity that has larger market reach and greater revenue opportunities. Companies typically purchase companies that have similar products, technologies or clients. Additionally, purchasing a firm in another country or industry can allow a business to expand into new markets and make use of lower tax rates.

The main motive for M&A is to increase efficiency of operations by creating economies of scale which means that the benefits of production volume can increase access to capital, cut manufacturing costs and boost bargaining ability with suppliers. By purchasing technology from another company, you could also save years of research and development expenditure.

Alongside gaining a foothold on the market that is new, M&A can transform a company into something it was never designed to be. For instance the brewing giants Anheuser-Busch InBev and SABMiller merged in 2016 to establish a greater presence in developing countries and continents. The acquisition also allowed the two companies to leverage their global infrastructures to reduce costs for supply chain. In the majority of M&A transactions, a company acquires the assets of another company by paying cash or stock and taking on any debts. This is the process of buying. The assets of the acquired company are recorded in the acquiring firm’s books as their market value (not book value).