Sale of underperforming assets
Not all companies in a group can be equally profitable. Sometimes there comes a time when it makes sense to sell a division in order to free up capital for investment in more promising areas or to optimize your operations.
A striking example is QIWI and Rocketbank. In the mexico number for whatsapp first half of 2019, the loss from this business reached about 1 billion rubles. The project is at the investment stage, but QIWI is trying to sell it. This may be explained by the inability to make Rocketbank profitable or the presence of more promising opportunities for using capital.
Business diversification
An example of a merger of companies in Russia with such a goal is Sberbank. The organization's policy led to the formation of an entire ecosystem of various areas, as a result of which the bank was renamed Sber.
Objectives of mergers and acquisitions of companies
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Yandex can also be included here. The company has diversified its business by providing taxi services and a number of other services. The development of technology projects in various sectors allows it to effectively manage risks within the organization.
Getting additional profit
Many companies are looking to make additional profits by focusing on promising areas. An example is Microsoft, which is actively developing in the video game industry. In 2018, the organization bought 5 studios to create applications.
Obtaining patents from the acquired company to develop new products
An example of a merger and acquisition of international companies is the Apple deal that took place in the summer of 2019. The company acquired part of Intel's business in order to use new modems in its smartphones. This transaction gave Apple access to more than 17 thousand patents for wireless technologies.
The company also gained human capital (starting from scratch is usually less profitable). After the deal was completed, about 2,200 employees joined the organization. Given that the modems in Apple phones have not been very good before, and the deal cost $1 billion, this will clearly benefit the company.
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The goal of any merger or acquisition is to increase profits for one or both parties. However, there are also less global objectives:
Business expansion
Expanding a business by capturing new markets is sometimes a cheaper and more effective way than organizing new production facilities or opening additional retail outlets. There are many examples of this approach in the consumer sector. For example, X5 Retail Group acquired grocery chains Korzinka, Kopeyka, etc. Amazon acquired Whole Foods, a health food retail store.