Question

In what three ways can companies consolidate

Answer 1

Companies can consolidate through mergers, acquisitions, and forming conglomerates.

Step-by-step explanation:

Companies can consolidate in three main ways: through mergers, acquisitions, and by forming conglomerates.

Mergers involve two companies of equal power and status joining together to form a single large corporation.

This can be done to increase size, efficiency, acquire new product lines, eliminate rivals, or change the corporate identity.

Acquisitions occur when one company purchases another, usually the more powerful partner.

In both mergers and acquisitions, there is often a duplication of services between the two companies that needs to be merged.

Conglomerates are firms that own at least four businesses that make unrelated products.

They are formed to protect the corporation through diversification, as the other companies can help protect profits if one is not performing well.

Answer 2

Consolidation is the merger and/ or acquisition of many smaller companies into much larger ones. There are many ways in which companies can consolidate. They include: Statutory Merger (a business combination that results in the liquidation of the acquired company’s assets and the survival of the purchasing company); Statutory Consolidation (a business combination that creates a new company in which none of the previous companies survive); Stock Acquisition (a business combination in which the purchasing company acquires the majority, more than 50%, of the Common stock of the acquired company and both companies survive).