Accounting and financial interview question (Why would two companies merge?)

What major factors drive mergers and acquisitions?

Simple and clear Answers:

 Mergers and acquisitions all have one underlying motive: to protect or improve the strength and/or profitability of the dominant company.

There are major factors that drive mergers and acquisitions. One of the main reasons why companies merge or acquire other companies is to create a synergy (cost savings).

Likewise another reason is diversification and to reduce cost of production, and thereby maximize profit. Similarly, Companies merge for the purpose of eliminating competition, and gaining a larger market share.

Read also: Technical interview question (How would you improve upon our product/ services?)

Leave your thoughts