1Department of Pharmaceutical Management, National Institute of Pharmaceutical Education and Research, Mohali.
A merger is the combination of two or more companies into a single corporation. The result of this action is the formation of one, new, 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. The overall goal is to ensure future stability and growth in the market. Reasons for mergers include reduced competition and/or product diversification, opportunity to expand by establishing their presence in a host country, to adopt technology from the other business rather than spending the time and money to develop it, Economies of scale and scope, to reduce its foreign exchange operating exposure. One major problem that may be incurred is cultural differences between the two businesses. This may lead to tension, conflict, and stresses between the organizations, namely its employees, lessening the chances of a smooth merger.
