Mergers & Acquisitions

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Mergers and Acquisition Advisory Service in Dubai, UAE

In recent years, mergers and acquisitions have picked up speed in the United Arab Emirates (UAE). Mergers and acquisitions typically have the goal of strengthening the position of two companies so that their combined value exceeds their individual values. The major justifications for mergers are technology integration, higher income, regional expansion, higher growth, diversification, tax advantages, etc. From beginning to end, the merger and acquisition process, which involves numerous processes and procedures, typically takes months.

The benefits of Mergers & Acquisitions?

There are many benefits of Mergers & acquisitions, some of which is listed below:

  • Often less expensive to buy than to build
  • If your business is underperforming and not meeting the expected growth it may be less expensive to buy an existing business rather than expanding it internally
  • Reduction in costs and overheads by sharing expenses, miscellaneous budgets, purchasing costs, etc

Why opt for Mergers & Acquisitions?

  • As you join or consolidate your corporate operations, overall performance efficiency typically rises while onboard costs typically drop.
  • The acquiring firm may have the chance or prospect to increase its market share without making a significant effort as a result of a merger. Alternatively, the acquirers simply pay a specific price to buy a competitor's business, which is known as a horizontal merger (explained below)./li>
  • When one considers buying their distributors or suppliers, they can avoid a lot of expenses that would otherwise be incurred. An acquirer saves on the marginal expenses that the supplier formerly levied when it purchases one of its suppliers, which is known as a vertical merger (described below).

Mergers & Acquisitions - Factors to be Considered

Factors to be considered during the course of Mergers & acquisitions processes are:

  • Form of consideration (Cash or Stocks)
  • Management integration
  • Accounting & Tax treatment
  • Goodwil

We can see 3 types of Mergers & acquisitions transactions

  • Horizontal Merger: Merger of two or more businesses in the same or related industries in order to enhance market share and revenue. Gaining more market share enables these businesses to exert price control.
  • Vertical Merger: Vertical mergers are used to diversify into new markets, such as when the manufacturing sector joins forces with its supply chain provider.
  • Conglomerate mergers: Businesses from many industries combine in an effort to diversify their business.