Fiscal crises are considered the precursor of great economic changes. The Great Depression in the 1920s, for instance, paved the way on our higher understanding of macroeconomics. Just like almost all economic innovations, mergers and acquisitions are also products of financial hardships. Mergers are business transactions when two companies (typically of same size) decide to create a new entity which will be managed by both. Acquisitions, on the other hand, are buyouts where one company takes over another. Although different in forms, they have the same business objectives: to win over market challenges and establish stronger market foothold.
Apart from filing for bankruptcy, struggling businesses owners may consider mergers and acquisitions as their primary options in saving their enterprises. On the other hand, some choose to have their business re-financed by foreign investors. In the U.S., for instance, there are some investors who are ready to immigrate in the country to invest in troubled businesses.
To let you see how mergers and acquisitions can powerfully change today’s business landscape, here are some of the most influential M&A deal ever conceived in 2015:
P&G-Coty Inc. mega-merger
In July, reports emerged about P&G planning to sell many of its hair care, cosmetic brands, and fragrance to Coty Inc. The move was strategic because P&G was able to focus more on their advantage (consumer products) while letting an industry leader take care of its beauty business.
CVS-Target pharmacy acquisition
Also in July, America’s largest dispenser of prescription drugs, CVS, agreed to buy Target’s pharmacy business for about $1.9 billion. If approved, the deal will be mutually beneficial for both parties: CVS will be able to expand its pharmaceutical portfolio while Target will be able to channel its efforts on areas they know best.
Holcim and Lafarge power-merger
On April last year, two of the biggest cement, aggregates and concrete manufacturers in the world decided to enter a power-merger. In July this year, the merger was approved, forming a single business entity called LafargeHolcim, which claims to be the biggest in the world.