Objectives of Amalgamation
1. Growth: Reaching market or geographic growth is one of the main goals of a merger. Gaining access to new markets, clientele, and distribution networks via a merger may help the combined company expand its market share.
2. Combination: The goal of amalgamations is to maximize synergies, which occur when the combined strengths of the merging organizations result in a more productive and efficient whole. Realizing synergies may take many different forms, including reduced expenses, increased productivity, and better capabilities.
3. Increasing Variety: Organizations often seek mergers to expand the range of goods and services they provide. One way to lessen the hazards of being dependent on a particular market or product line is to merge with a firm that operates in a different sector or offers complementary items.
4. Economies of Scale: Reaching economies of scale is a shared goal since the merged company may distribute fixed expenses across a bigger output or clientele, which results in cost benefits. Profitability may increase as a consequence of decreasing average expenses per unit.
5. Advantage of Competition: The goal of mergers is to get a competitive edge in the marketplace. Through the combination of resources, knowledge, and market share, the combined organization may enhance its competitive standing, with the possibility of surpassing competitors and gaining a greater market share.
6. Integration of Technology: In sectors of the economy where innovation is key, mergers and acquisitions make it easier to incorporate complementary technology. Combining with a business that uses cutting-edge technology may boost innovation and competitiveness in the marketplace.