Posted on : 2023-01-27 03:10:27
Article : Good evening, Management TASK 227- Mergers and acquisitions (M&A) have demonstrated to be key in achieving the growth and gaining the competitive advantage that businesses are craving.
Mergers & Acquisitions (“M&A”) is an interesting strategy through which two or more business entities enter a series of financial transaction through which amalgamation or takeover of the relevant entities takes place for various purposes. These became extremely popular in the late 19th century and are carried out even today in huge numbers. In the last twenty years, a record number of M&A transactions have taken place in India as well as across the globe. Commercial legislations like the Companies Act, 2013, the Competition Act, 2002 the Income Tax Act, 1961 and other relevant regulations govern the legal, regulatory and compliance aspects of these transactions. Therefore, all entities must be mindful of all pertinent legislations when entering an M&A transaction.
M&A transactions may seem simple prima facie, however, they can often have a very complex side. Each transaction is entered into for a different purpose – the terms and conditions of each may vary significantly from the other; thus, even the result of one deal/transaction may be quite different from that of another deal. Mergers and acquisitions can be categorized into several types depending on the objective that the entities seek to achieve through the transaction, the way in which the transaction is structured and the nature of the entities entering the transaction – some types are horizontal mergers, vertical mergers, congeneric mergers, conglomerate mergers, hostile takeovers etc.
Mergers and acquisitions (M&A) have demonstrated to be key in achieving the growth and gaining the competitive advantage that businesses are craving. Consumer requirements are constantly changing, and businesses are now listening. For example, there are consumers on the go who always look for the most convenient packaging solutions with specific offerings that cater to their mile-a-minute lifestyle. Along with convenience, consumers are demanding transparency. Where did these products come from, and what are they made of? A recent study indicates that 75 percent of shoppers are more likely to switch to a brand that provides more in-depth information beyond what is shown on the label.
Manufacturers are challenged to not only produce more adaptable and accommodating packaging, but to also improve transparency of their operations and production processes. To keep up, businesses are turning to mergers and acquisitions. PepsiCo, for example, recently acquired “Health Warrior”, a company that offers products made of chia, pumpkin seeds, and other superfoods—ingredients that consumers are interested in due to their numerous health benefits. Mergers and acquisitions offer established companies a shortcut to expanding their product base in order to meet changing tastes.
Digital transformation has also been a major disruptor across all industries. CPG companies have been searching for new ways to take advantage of emerging and evolving technologies. Such technologies, like augmented reality, will provide efficiencies that offer customizable user experiences. A trending popular Strategy that brands are focusing on is the targeted acquisition of smaller companies. These acquisitions are made with the intention to add another brand to a product umbrella or enter a new market or due to these products marketers more consumer loyalty. Acquiring these smaller companies can help bigger companies to eventually expand their product base and gain the loyalty of their customers.
With M&A activity on the rise, CPG companies will continue to attract more consumers by adhering to their requirements and providing a more diverse product portfolio. Companies are already modifying business models, including the manufacturing processes by producing convenient and traceable products, some with digital attributes, that will allow them to stay on top.
We have discussed in the above paragraphs’ relevant possible information on M&A. Now we request you, to post your relevant suggestive inputs for our elite eiders of this M&A topic. Our god morning Management solution to the task will discuss in elaborate fashion quoting suitable brand examples of mergers and Acquisitions on our 30th Jan Good morning management solution for TASK 225.
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