The dawn of another week, and the dawn of potentially another high-profile tranche of mergers and acquisitions (M&A) matters across industry.
This Monday morning we have seen Aberdeen Asset Management and Standard Life announce agreed terms for an all-share merger, and the French company that owns automotive giants Peugeot and Citroen (PSA) reveal a €2.2bn ($2.3bn) deal to buy General Motors’ (GM) European unit, including Vauxhall.
For the former, the move will create one of the UK’s largest fund managers, overseeing assets worth £660bn, subject to shareholder approval. For PSA, it is thought that the move for GM Europe will expand its market coverage. With GM Europe not making a profit since 1999, there will likely be a focus on the synergy and savings to be made to realise the business’ profitable potential.
Both are very topical cases that exemplify the fundamental principles behind M&A. Put simply, M&A is one company seizing an opportunity to acquire another to strengthen its business, whether that’s by increasing its footprint, diversifying its offering against the backdrop of a challenging market, or purely to capitalise on another company’s ability to turn a profit.
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