(i) Economies of Scale: This generally refers to a method in which the average cost per unit is decreased through increased production
(ii) Increased revenue /Increased Market Share: This motive assumes that the company will be absorbing the major competitor and thus increase its to set prices.
(iii) Cross selling: For example, a bank buying a stock broker could then sell its banking products to the stock brokers customers, while the broker can sign up the bank’ customers for brokerage account.
(iv) Corporate Synergy: Better use of complimentary resources. It may take the form of revenue enhancement and cost savings.
(v) Taxes: A profitable can buy a loss maker to use the target’s tax right off i.e. wherein a sick company is bought by giants.
(vi) Geographical or other diversification: This is designed to smooth the earning results of a company, which over the long term smoothens the stock price of the company giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders.
(ii) Increased revenue /Increased Market Share: This motive assumes that the company will be absorbing the major competitor and thus increase its to set prices.
(iii) Cross selling: For example, a bank buying a stock broker could then sell its banking products to the stock brokers customers, while the broker can sign up the bank’ customers for brokerage account.
(iv) Corporate Synergy: Better use of complimentary resources. It may take the form of revenue enhancement and cost savings.
(v) Taxes: A profitable can buy a loss maker to use the target’s tax right off i.e. wherein a sick company is bought by giants.
(vi) Geographical or other diversification: This is designed to smooth the earning results of a company, which over the long term smoothens the stock price of the company giving conservative investors more confidence in investing in the company. However, this does not always deliver value to shareholders.
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