The Mergers: Their importance in the current competitive environment

Abstract

Over the last decades, a competitive business environment has led firms to make a great deal of changes. Several business strategies have been implemented to keep consistency and even growth faced by strong global economic forces. Agreements and joint ventures are today's common actions to look for strength, a bigger share market or new markets, access to new technology, etc. These agreements are negotiated among businesses in all regions and countries all over the world. Actual economic conditions clear the way for some alliances to end as acquisitions of the strongest firms.Mergers, understood as the union of two or more firms to build a new enterprise to make several ends meet, constitute a present phenomenon nowadays. In some cases, firms are merged as a common agreement. Some other cases are a result of hostile acquisitions, as opportunities to expand or as newcomers to other regional markets. A merger involves productive, distribution, and commercial activities reorganization. Goals are increasing efficiency, wider possibilities for innovation, and a better market position. Our purpose is to outline fusions' relevance as an entrepreneurial and strategic partnership for organizations in an actual competitive environment. Firstly, merger history examples are outlined and a theoretical presentation is aborded on concepts, types, reasons to go through, and success and failure factors. Several fusion cases are shown and a final reflexion is outlined.