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MERGERS AND ACQUISITIONS (TERMS (2.MERGER (involves 2 companies coming…
MERGERS AND ACQUISITIONS
TERMS
2.MERGER (involves 2 companies coming together on more equal terms. As usually there is a dominant partner)
1.ACQUISITION (TAKEOVER (refers to one firm gaining control of another by buying over 50 percent of its shares)) Over 50% - controlling interest
3.JOINT VENTURE (involves two quite separate companies co-operating for a limited time, or for example in a particular geographical area on a particular project, but maintaining their own identities.)
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REASONS FOR TAKEOVER
- Maximize the profit and capital
- It is easier to take a dominant position in the market
- To win a bigger part of the market
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