Companies merge and acquire other companies for a lot of strategic reasons with different degree of success. The success of a merger is measured by whether the value of the acquiring firm is enhanced by it. The impact of mergers and acquisitions on organization can be small and big in other cases.
Mergers and acquisitions immediately impact organizations with changes of rights, and ideas and eventually, in practice. There are multiple reasons some are motives and financial forces just to name a few. There are financial risks of merging with or acquiring an organization this is why you must have a strategic plan in place in order to benefit.
Companies merge with other companies for one main reason that is to make money.
The vertical merger happens when a company moves up or down its own product line. The sensible reason for merging with or acquiring a company is that it makes financial sense.
In November 2004 Sears and Kmart said that they were going to be merging together this combination would become the largest retail merger that there is. This has turned out to be a great spin for Kmart considering that they had bankruptcy issues less than a year earlier.
Some complimented Kmart’s acquisition of Sears. Those most positive look to opportunities to cut unnecessary administrative expenses, increase buying power and cross-sell well known merchandise between Kmart and Sears. There are those who are very concerned about the acquisition. They are afraid that Wal-Mart, being their biggest competitor, will still be so much bigger than the combined Kmart and Sears. The name of the merged company will be changed it won’t be called sears. The acquisition of Sears cost to Kmart organization is billions. The companies, Strategic organizational plan have been a brilliant move.
This merger happened for very low cost effective reasons. This merger is important for both companies in their own ways separately. There is a lot of negativity about the acquisition fear about Wal-Mart because they are the biggest competitors. Some are afraid that the merger between sears and Kmart still won’t be big enough.
No matter what Kmart will still benefit from the planned cost sharing of several of Sears’s leading companies and the products as well as present opportunities to capture important revenue and cost including merchandise and non-merchandise purchasing.
Both Kmart and Sears bring visible strengths to the table Kmart bring band names such as Jaclyn Smith, Joe Boxer, Martha Stewart Every day, Route 66. I just purchased a couple of summer dresses and I always shop at Macys so they are on their way.
Sears is very well known for its brand name appliances being the largest appliance retailer in the U.S. it sale brand names like Kenmore, Craftsman and Die Hard. That last thing that I read is that the merger is expected to generate $500 million of annualized cost.Two big named...