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8 Ways Investors and Businesses Can Benefit from Merger and Acquisition

The Merger and Acquisition (M&A) trend is witnessing a rapid surge in the European Union and the UK as many companies are struggling due to the adverse effects of the COVID-19. M&A is proving to be an opportunity for those businesses who are finding it hard to survive in the market as well as for investors who want to expand nationally or internationally.

 

However, given the uncertainty present in the current market, buyers and sellers both need to be aware of the risks inherent in M&A transactions, social & economic characteristics, and legal regime of the local jurisdictions of the company being sold or ready to merge.

 

Each of the transactions will present unique issues and, thus, all parties should engage with reputed international business advisory firms at the earliest opportunity to assess their options and develop strategies to make the transaction smooth and hassle-free.

 

M&A in the UK and the EU offers a plethora of benefits to both, the buy-side and the sell-side. Some of these include:

 

  1. Access to quality staff or additional skills

When two companies from similar or complementary domains combine, both benefit from quality staff, additional skills, knowledge of the industry, and business intelligence. For instance, if a business is failing to continue due to lack of funds but is widely known for its quality service and products, then getting merged with another company that is capable of providing funds but requires improvement in the management and quality area will allow both companies to grow together more fiercely.

 

  1. Strengthen the underperforming business

If your own business is underperforming with regional or national growth, it might be less expensive to strengthen it by buying or merging with an existing business than to expand internally all on your own. The increased capabilities may come in the form of expanded research and development or more robust manufacturing operations.

 

  1. Access to valuable assets for new development

When you don’t have access to better production or distribution facilities in a niche market, M&A is an ideal option which is much cheaper than building your own production unit or distribution line. Since COVID-19 has paralyzed even those who used to perform excellently in pre-pandemic situations, you can target such businesses to benefit from their large unused capacity.

 

  1. Opportunity to expand internationally

The current market is offering various amazing opportunities to investors looking for expanding their business or building their presence in overseas or international markets. At present, they can easily get their hands on companies in the UK and the European Union that they were unable to purchase before. It’s a smart way of expansion rather than starting from scratch.

 

  1. Access to a wider customer base 

By purchasing companies in the UK and the European Union, you will get access to a wider potential customer base. In 2020, the UK alone has a population of more than 67 million and the European Union (with 27 member states) has a population of almost 448 million. In other words, you can get such a wider potential customer base practically overnight.

 

  1. Scope for reducing costs

When two companies have similar products or services, merging can create an opportunity to reduce costs. They can combine locations or reduce operating costs by integrating and streamlining support functions. This is often a great strategy because when the total cost is lowered and the volume is increased, both can maximize total profits.

 

  1. Better leadership

A private company can choose to be acquired or merged if its current owner cannot find someone reliable within the company to succeed them. So, investors have a great opportunity to intervene and make an offer for acquisition or merging.

 

  1. Survival during uncertain times 

It is never easy to find a company that willingly gives up its identity to another company. However, the COVID-19 pandemic has upended the economy and market conditions. It has left many businesses with fewer choices, including shutdown, merging with another company, or selling their business. For a very long time, a lot of companies are using M&A strategies to grow and survive during tough times rather than getting out of the industry.

 

Compyco can help you with the Merger and Acquisition of businesses in the UK and the European Union. Being an elite international business advisory, we will consult you throughout the M&A procedure, clear all your doubts, and provide you with several viable options for company acquisition as well as merging. So, if you are interested in combining with or acquiring business in the UK and/or the EU, contact us to find the best options and close profitable M&A deals.