In a recent decade, Mergers & Acquisitions (M&A) have turn into a robust growth strategy for organisations or firms which are fundamentally emphasized to expanding their operations, thereby reaching greatest piece of the overall industry in new markets.
However, Mergers and Acquisitions are not always fruitful or successful due to different induced variables. As indicated by ‘Shattock’s (2010)’ study, the takeovers are not always translated into success and mergers sometimes undertaken out of weakness due underestimation of integration costs. A study of ‘Shattock (2010 p.190) also revealed that “mergers can be disruptive, will distract key staff, will delay new initiatives and, in the short term, will prove to be drain on recurrent and capital funds.”
Despite all the challenges, the majority of joint ventures and Strategic Partnerships are the result of globalisation where one company partners another in some other market or geographic location to transfer technology, to get access to potential resources in new markets.
Different approaches of financing Mergers and Acquisitions
The method of financing plays a vital role in mergers and acquisitions. There are various methods accessible to finance for M&A. However, it is essential to understand merits and demerits of every method before taking financing related decisions
Cash: Cash is flexible and cheap contrasted with different methods because it is without wreckage and instant transaction.
The issue is that whether company got large amount of money in hand because the entities are normally tremendous means having access to huge amount of cash is not always easy.
