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CH-4: TOPIC – ENTERPRISE GROWTH STRATEGIES

                                                    CODE : 241604010114


               NOTES :

                   1.  SYNERGY- The combined value of the merging firm exceeds the individual value of the merged
                       firms. This the most common reason. (2+2=5 )
                       Operating and Financial synergy. ( TAX SHIELDS)
                   2.  ACQUIRING NEW TECHNOLOGY – To remain competitive companies need to update the
                       technology.
                   3.  IMPROVED PROFITABILITY – This is also a very common reason of merger to increase their
                       profitability.
                   4.  ACQUIRING COMPETENCY – To acquire the competency or capability which they do not have.
                   5.  ENTRY TO A NEW MARKET
                   6.  ACCESS TO FUNDS
                   7.  TAX BENEFITS

               REASONS OF FAILURE :
               Unrealistic price paid for the target company
               Difficulties in cultural integration
               Overstated synergy
               Integration difficulties
               Poor business fit
               Inadequate due diligence
               High leverage
               Boardroom split
               Regulating issues
               Human resource issues
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