M&A is a key factor in corporate life. Online M&A transactions have become more common. During a merger two companies will join to form a single entity (merger), or they buy the other company from its shareholders and take the operations of the other company (acquisition). Both kinds of M&As are associated with significant financial implications. Companies take part in M&A to capitalize on synergies and economies of scale, which enable them to reduce the cost of redundant resources such as branch and regional offices, manufacturing plants, research projects and the like. The savings resulting from these cost reductions flow directly to the bottom line and are known as an accretive transaction.
Other motives for M&A include competitive and strategic reasons that include accessing new technology or capability, or expanding into the market. Cisco recently bought Purple Direct-to-Consumer mattress seller for $1.1 billion. These deals are more appealing for investors than the standard equity deal in which the investor buys shares of the dataroomonlinetech.com/maximizing-the-due-diligence-process-with-a-vdr-best-practices company acquiring them and then retains them for a longer period of.
M&A could be affected in the near term by the coronavirus epidemic that is currently sweeping the globe. Buyers will need to weigh the benefits of a deal against risks and costs, as well as internal arguments for making an acquisition are likely to be more compelling. It may take longer to get third-party approvals, including from customers and intellectual property licensees. M&A valuations are more difficult to determine due to the coronavirus epidemic, and the adage “getting everyone in the same room” isn’t feasible right now.