Merger versus acquisition of companies which is the best option?

The merger and acquisition of companies are two different strategies. However, the two have a common goal, which is the expansion of a business.

However, it is important to understand the difference between the two formats so that you can make the best decision for your business. Considering that, the processes are different and each one will deliver a certain result.

Find out more about mergers and acquisitions below.

What is a merger of companies?

The merger of companies is the union of two companies in a move that aims to obtain benefits such as portfolio expansion or market share.

A merger typically occurs when two companies want to consolidate a partnership structure. In doing so, a new company will be created and the two companies originally involved in the merger cease to exist.

Currently, in Brazil, there are different models for mergers. It is possible for two companies from the same sector to merge as well as companies from different sectors to merge.

The aim is always that the move has benefits for both parties. Thus, there is the possibility that the new company will reach a larger market, with more results.

What is business acquisition?

The acquisition of companies is when a company takes control of another, integrating their business operations.

In this type of process, the company that was acquired is incorporated into the business that made the purchase. Therefore, the company ceases to exist, while the buyer does not change its name or legal structure.

In an acquisition, it is possible to acquire companies in the same industry or sector or in a complementary sector.

Therefore, it is a strategy aimed at gaining a greater market share. In addition, it aims to expand the growth of the company that purchased the other company.

What are the differences between a merger and an acquisition of a company?

In general terms, in a merger, two organizations join forces to create a new business that will have greater market control. Acquisitions, on the other hand, rely on alignment, mainly the decisions taken by the board of directors of the two businesses involved such as personnel overlap, management, etc.

The processes for mergers and acquisitions are different. However, in both cases, negotiation is careful and a fundamental part of the success of the transaction. Which path you go down depends on your objectives in relation to your business. It is also important to understand the opportunities that are available in the market so that appropriate negotiations can be initiated.

In both cases, a good negotiation that is consistent with your objectives will bring positive results for the business, thus enabling the expansion of the company in the market.

Brasco Enterprises: invest in Brazil with experts in the field

Whether you’re planning on a merger or want to acquire a company in Brazil, the team at Brasco Enterprises can help you to do great business in the country.

It is possible to acquire Brazilian companies and become an investor in the country, generating jobs, making income, and profiting from the domestic market.

From mergers and acquisitions to creating a business in Brazil from scratch, our team has the expertise to assist you in decision-making and to deal with the complex bureaucracy involved.

Get in touch, learn about our solutions, and take advantage of what we can offer to fulfill your desire to invest in Brazil.

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