How to create shareholder value through acquisitions
Acquisition was originally posted on EpicTop10.com and is reused here under the terms and conditions of the Attribution 2.0 Generic (CC BY 2.0) Creative Commons license
It is self-evident that through the implementation of a strategy of mergers and acquisitions, the value of the shareholder’s share increases, since it reflects a higher monetary valuation.
The company’s capital base is expanded and its value is enhanced by the acquisition of more operational facilities.
In essence, the main advantage associated to shareholders’ value is the creation of the necessary conditions for the development of synergies between the newly formed group of companies.
According to Ansoff, this is due to the fact that, in synergies caused by mergers or acquisitions, the sum of the combined forces of two or more companies, represents a greater number, than the pure mathematical number which is the result of the summation.
Therefore, in the case of synergies, “2+2=5”, which shows the magnifying effect of…
