Case Study on Mergers and Acquistions

Task 1:

The reasons for mergers and acquisitions facilitate growth and expansion of a business organization in an easier manner. This growth is much faster when a business organization is able to either merge or acquire another existing business, the merger or acquisition enables a business to either increase its capacity related to products and services provided or are able to achieve economies of scale which enable it to gain a foot hold in a different market as well as increase its product portfolio and gain technological knowledge, so at to become more profitable. Just to cite an example I would consider the acquisition made by Sony to take over Ericsson, the phone making company which was based in Europe.

Task 2:

Whenever an acquisition is being made the fore most criteria which guide the growth and expansion plans of any organization is the profitability factor. Connected to this factor could be a whole lot of underlying factors for the acquisition. Growth and expansion can either be through horizontal integration, vertical integration or lateral integration. The acquisition reason can attributed depending on the outlook of the owners, and the industry in which the business operates. Usually for most beer companies, since beer is a popular drink in nearly most countries – companies that whish to grow and expand will usually go in for horizontal integration whereby they would be taking over an existing beer manufacturing brewery which gives it the advantage of increasing its capacity of beers and increasing its market share.

Task 3:

According to the case that I am looking at, the management of the firm that is doing the acquisition state that there will be minimal impact of the stakeholders. The only stakeholders that will be benefited will be the stakeholders of Fullers, but the Gales Brewery in Horndean, Hampshire will be closed down.