What are the advantages and the disadvantages of a merger?

American Public University System| finance600 | American Public University System

There are many benefits to a merger. First, mergers can increase market share because they combine the customer bases, resources and product lines of multiple companies. The mergers can also result in cost savings as marketing and research costs, among other expenses like development and research, are shared between the entities. Mergers can also lead to increased efficiency and better access to capital, which allows for expansion in new markets.

There are also some drawbacks to mergers. Mergers can also be expensive and result in increased stress. If not managed well, mergers could lead to lower employee morale as a result of job changes and losses. Additionally, differences in culture between merging businesses could make it difficult to come up with a strategy or operational plan. Each of these aspects should be considered prior to any merger, so everyone involved has realistic expectations about its outcome.

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