{"id":1244,"date":"2019-03-06T00:20:10","date_gmt":"2019-03-06T08:20:10","guid":{"rendered":"https:\/\/addison.lwh.dev\/insights\/ma-deals-value-pros-cons\/"},"modified":"2019-03-06T00:20:10","modified_gmt":"2019-03-06T08:20:10","slug":"ma-deals-value-pros-cons","status":"publish","type":"post","link":"https:\/\/addisongroup.com\/insights\/ma-deals-value-pros-cons\/","title":{"rendered":"Weighing In: Do M&amp;A Deals Add Value?"},"content":{"rendered":"\n<p>The organization you lead is doing well overall. International trade changes along with on-and-off recession concerns create pricing challenges for companies. Some are interested in pursuing mergers or acquisitions (M&amp;A) to both appease current shareholders as well as attract new ones. To best guide client businesses, we have decided to weigh in on the current pros and cons of M&amp;A deals. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Pros Regarding M&amp;A Deals <\/h3>\n\n\n\n<p>A merger involves one company acquiring another to extend its reach and market potential. This happened in<a href=\"https:\/\/www.retaildive.com\/news\/deal-of-the-year-amazon-buys-whole-foods\/510536\/\"> 2017 when Amazon acquired Whole Foods.<\/a> On a more local level, an acquisition may occur when a large telecommunications firm purchases another with more limited service range and capabilities.<\/p>\n\n\n\n<p>In either case there are pros\nfor each company.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Existing infrastructure creates expedient expansion\nand upgrades.<\/li><li>Consumers see the benefits of expanded services in the\nform of improved pricing, as is the case with retail bulk buying and\ndistribution.<\/li><li>Each company\u2019s strengths add to overall value.<ul><li>A smaller\nbusiness gains from large scale management expertise and systems.<\/li><\/ul><ul><li>A larger business\ngains from the smaller firm\u2019s assets, such as technological innovation.<\/li><\/ul><\/li><li>Increased profits contribute to research and\ndevelopment. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Cons Regarding M&amp;A Deals<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Leadership changes for either company can destabilize\noperations for months or more.<\/li><li>The potential loss of jobs within a sector or region.<\/li><li>Negative effects on markets, such as loss of services for\nlocal areas. <\/li><li>The potential for increased prices and service changes\nfor consumers, particularly if the merger creates a monopoly.<\/li><li>Economies of scale may falter if communication,\ncoordination, and efficiency lag.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Shareholder Value: What to Expect <\/h3>\n\n\n\n<p>Mergers affect both companies\nwith shareholders seeing stock volatility as the acquisition is implemented.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Stock value of both companies is likely to experience\nalterations until the merger stabilizes.<ul><li>The acquiring\ncompany\u2019s stock is likely to dip in value.<\/li><\/ul><ul><li>The merging company\nis positioned to see a temporary increase. <\/li><\/ul><\/li><li>Shareholders experience a period of voting instability\nrelated to stock distribution.<\/li><li>Board composition will shift in terms of numbers and representation.<\/li><li>Successful acquisition of a company within the midst\nof economic promise is likely to lead to stock gains.&nbsp; <\/li><\/ul>\n\n\n\n<p><a href=\"https:\/\/dlcinc.com\/our-work\/#our-services\">Click here<\/a> to find out about DLC&#8217;s M&amp;A Due Diligence Support and other services. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The organization you lead is doing well overall. International trade changes along with on-and-off recession concerns create pricing challenges for<\/p>\n","protected":false},"author":9,"featured_media":562,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[11],"tags":[],"post_function":[],"post_audience":[],"class_list":{"0":"post-1244","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-article"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Weighing In: Do M&amp;A Deals Add Value? - Addison Group<\/title>\n<meta name=\"description\" content=\"To best guide client businesses, we have decided to weigh in on the current pros and cons and shareholder value of M&amp;A deals.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/addisongroup.com\/insights\/ma-deals-value-pros-cons\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Weighing In: Do M&amp;A Deals Add Value? 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