Mergers and acquisitions
A merger occurs when two firms of roughly equal size combine to form a new entity, whilst an acquisition involves one firm purchasing another firm. Both represent inorganic growth strategies that immediately increase firm size and market presence through combining operations.
Real World
Microsoft's £55 billion acquisition of Activision Blizzard in 2023 gave it instant access to franchises like Call of Duty, bypassing years of organic game development.
Exam Focus
For evaluation, note that most studies find over 50% of mergers fail to deliver expected synergies — always consider diseconomies of scale.
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