Firms acquire, merge, and purchase other companies for various reasons; the main reason is to have improved sales revenue and business gains. The following are the main reasons why firms decide to buy others in the same line:
To improve their sales concentration by reducing competition
To enjoy economies of scale that is likely to result from an increased business after the purchase
To enjoy operational benefits that might be with the sold company
To consolidate the market and enjoy management efficiencies that might come with the new acquisition
When a purchase is made, both companies conduct the exercise with mutual benefits to have a better company than when they are operating independently.
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