Mergers and Acquisitions (u5 p87)

Merger - an agreement between two organisations to integrate on a relatively equal basis.
Acquisitions - one organisation buys a controlling interest in the other organisation

Acquisitions often become an operating subsidiary, but sometimes will be totally integrated.


m&a can increase an organisation's market power, through horizontal integration. An ability to make m&a work repeatedly may be considered a capability posessed by a serial acquirer, for example Cisco, Electrolux.


m&a can be risky though. Often, managers can become primarly focused on assimilating the two firms and can lose sight of the core business, leading to a deterioration in performance.