Through this guide we will tell you about the types of company mergers and acquisitions , examples of the most common methods of buying and selling companies.
The merger or acquisition of companies
While all businesses are born for the purpose of prosperity, sometimes the realities change. Given this, the purchase and sale of companies is relatively common. It does not always have to be related to bankruptcy or unfavorable circumstances, as offers sometimes come up that cannot be shelved.
In any case, the aforementioned is an undeniable truth. Many times companies are bought because they go bankrupt. The above usually occurs because people are not aware of how to manage the company’s money correctly . Therefore, it is highly recommended to properly manage finances .
Regardless of the reason for the sale and purchase of a company, the truth is that there are different types of purchase . Being more specific, when it comes to large company purchases, there are many modalities that can be used. However, this also applies to many smaller companies.
Types of Business Mergers and Acquisitions – Examples
Usually the buying and selling of companies is something very well known, mainly among transnational companies . In any case, it is very convenient for every entrepreneur to know the various ways used to acquire a company. Next, we will discuss some examples of the most common purchase / sale modalities of companies .
Pure fusion
When we speak of pure merger, we refer to the union of two or more companies. Usually this type of merger leads to the birth of a new entity . In most circumstances the union or pure merger of two companies, arises when they are at a similar level.
Fusion by absortion
A takeover merger is relatively common when a tycoon or company buys a smaller one. In most cases, the legal nature of the first company is maintained. In other words, the absorbed company becomes only a part of the buying company.
The merger by absorption is relatively common in those companies that for some reason or another are not going through good times financially. In order not to go through this, it is recommended that you know the disadvantages of a lack of working capital in companies , a cause of bankruptcy and other financial problems in business.
Leveraged purchase of employees
The purchase leveraged by employees refers to all business acquisitions made by employees of the same company. In other words, it arises when employees buy the company they work for . Usually, this happens with external financing, although in smaller companies it can even occur with capital from the same employees.
Purchase by internal management team
It refers to when the management team of a company decides to make the purchase of it. This can be avoided with own capital from the same board of directors or with external financing.
Purchase by external management team
Here are all those purchases in which a management team other than the current one in the company intervenes. This usually occurs when buyers feel that the current management team of the company does not measure up to the requirements .
Purchase by internal and external management team
As its name indicates, it refers to the purchase of a company by both the internal management team and by people outside the company , although it usually includes investors and directors of other companies.
Regardless of whether you are interested in buying or selling a company, it is essential to handle yourself precisely in sales management and know its importance . It seems unrelated, but such basic principles may be useful in more significant circumstances.
