Buying out Local Companies Mergers Takeover


 
 
Concept Explanation
 

Buying out Local Companies Mergers Takeover

Meaning of Mergers & acquisition :- The term Mergers and Acquisitions (M&A) refer broadly to the process of one company combining with one another. In an Acquisition, one company purchases the other outright.  A Merger is the combination of two firms, which subsequently form a new legal entity under the banner of one corporate name.

Buying Out Local Companies/Mergers/Takeover: The most common route adopted by MNCs is to buy local companies and expand production. A wealthier MNC can easily do so. Infact, many of the top MNCs have wealth exceeding the entire• budgets of the developing country’s government. This way they have much power and influence. An example of merger of local company by an MNC is Cargill Foods. It is a very large American MNC which bought Parakh Foods (after starting a joint venture with it), an Indian company, which had four edible oil refining units and a large marketing network in all over India. Now, Cargill is the largest producer of edible oil in India with capacity to produce 5 million pouches daily.

 
 


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