What are the motivations for mergers and acquisitions?

Mondo Finance Updated on 2024-02-03

M&A is an important measure for enterprises to enhance their competitiveness, and its motivation is mainly to effectively integrate resources to obtain new industrial growth points, obtain the required scientific research and technology, obtain a certain market share, obtain relevant brands, and obtain the required talents. Since the beginning of this year, the number of listed companies issuing M&A plans has been on the rise, and non-listed companies in many industries have also had merger and acquisition intentions.

Obtaining new industrial growth points is an important reason for state-owned enterprises and central enterprises to initiate mergers and acquisitions, which can carry out professional integration of high-quality resources in traditional industries, and move more high-quality resources out to pour into emerging industries, more significant in the fields of integrated circuits, electronic information, equipment manufacturing, etc., and the "national team" has made a professional integration of energy, minerals, technology, and important industrial facilities to enhance optimization.

For example, in the property and logistics industries, leading enterprises increase their market scale and enhance their voice in the industry through mergers and acquisitions. Platform companies also try to achieve market share as much as possible through mergers and acquisitions to avoid being taken advantage of by competitors of the same level.

Large enterprises in some industrial fields are accustomed to obtain certain key R&D technologies and talents through mergers and acquisitions, which are more common in chemical, biopharmaceutical, machinery and equipment, automotive electronics and other industries.

In order to avoid restrictions in the upstream of the industrial chain, leading enterprises in some industrial fields will achieve control over the required critical mineral resources through mergers and acquisitions, mostly in the fields of energy and new energy. Service-oriented enterprises will also gain more user resources and certain brand power through mergers and acquisitions.

In general, the activity of the M&A market is conducive to creating a good market ecology and achieving efficient resource integration.

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