Mergers and acquisitions is surely an important and effective growth strategy, but they could also destroy value if the finding company overpays for the target. The price of a great acquisition must be based on price savings and revenue generation devices (synergy https://dataroomcloud.org/role-of-corporate-strategy-department-in-ma value) that will be created simply by combining each of the companies.
The importance of an purchase can be a lot greater than the total purchase price, should you add up the EBITDA from both parties. This can be called accommodement.
The value of mergers and purchases has exploded over the last 30 years, exceeding $12 trillion in trades announced. The activity has paled in comparison to the well-known merger pallino of the 1980s, but it is always a highly powerful strategy for companies looking for new markets and features.