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1 Introduction Diversification mergers or acquisitions since the 1980s and even more in the late nineties has become a growing trend for companies both large and small domestic and foreign to form strategic alliances within their particular industries There are many specific goals that companies may be looking to achieve by doing this but the main underlying reason is to guarantee the long-term sustained achievement of fast profitable growth for their business They have to keep up with a rapidly increasing diversified global market and increased competition Nowadays with the struggle for competitive advantage becoming stronger and stronger it is almost essential to form alliances Diversifying and expanding techniques such as mergers and acquisitions are very popular methods for forming these alliances Basically stated A merger is the combining of two or more companies into a single corporation This is achieved when one company or business purchases the property or some other form of assets from another company The result of this action is the formation of one corporate structure This new corporate structure retains its original identity An acquisition is a little different from a merger in that it involves many problems being dissolved and an entirely new company being formed Much research and planning is required in the early stages of these processes which starts with an acquisition strategy used in trying to find a suitable company to merge with I have chosen to assess the automobile industry focusing on predominantly horizontal integration as one the preferred method of affiliation by global automobile players 2 Successes and failures Some mergers like marriages are made in heaven The union of two companies augments revenues boosts profits generates shareholder value and wins applause on the stock exchange Other mergers - also like marriages -are made in hell Turf battles break out management deadlock ensues revenues fall the stock plummets and inevitably a slew of shareholder lawsuits challenges the ill-matched combination The hard
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