What is one of the main reasons companies engage in mergers and acquisitions?

One of the main reasons companies engage in mergers and acquisitions is to expand market share. When a company acquires or merges with another, it can instantly increase its customer base and sales volume, gaining a larger presence in the market. This strategic move can lead to enhanced competitiveness, higher revenues, and potentially greater economies of scale, which can improve profitability.

By broadening their market share, companies also position themselves better against competitors, allowing them to influence market prices and trends more effectively. Additionally, larger market shares can often translate into increased bargaining power with suppliers and enhanced brand recognition. The goal is to create a stronger entity that can capitalize on new opportunities and foster growth in a way that would be difficult to achieve independently.

While minimizing operational costs, increasing employee satisfaction, and reducing competition can be positive byproducts or secondary goals of mergers and acquisitions, the primary focus for many companies is indeed to expand their market presence and drive growth through increased market share.