2018/04/05

Pros and Cons of Agressive M&A – Series M&A Strategy 3

Be Careful What You Wish For

M&A can be both a sword and a shield for your business depending on how you implement M&A into your corporate strategy. In this article, we’re going to explain the 2 types of M&A that you should consider before proceeding with your M&A strategy.

2 Types of M&As

Most M&A cases fall into 2 types. Horizontal and Vertical. Horizontal M&As are when both the buying side and the selling side are competitors. This type of merger tends to be  extremely efficient because the buying side can fully utilize the additional resources acquired through M&A. On the other hand vertical M&As are when the buying side acquires another com the same value chain that they exist in. These cases do not tend to end very well hence there isn’t much common knowledges to be shared between the companies, creating conflicts in their operation.

So when your M&A strategy falls into this vertical type, think carefully of the synergy the M&A will create and  understand that it may take some time to see the positive effects that you’re aiming for.

In this series, we’ll explain why M&A can not only save many SMEs but can also be a handy tool to strengthen your business quickly and efficiently.

To learn more about M&A for SMEs in Japan, don’t forget to checkout this book. (only available in Japanese)

『200万円でもできるM&A~百年企業を育てる最強のM&A活用術』(スモールサン出版)

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