SUMMARY
Firms may also expand through combinations which are often known as mergers and acquisitions (M&As). M&As may be vertical, horizontal or conglomerate. They are acquisitions and amalgamation. Again, they are hostile take-overs, friendly take-overs and leveraged buyouts. The formation of a holding company is also a form of combination.
There are a number of forces that encourage combination. These are reaping of the synergistic effects, doing away with the competition, reaping oligopolistic gains and diversification benefits. Tax consideration and personal consideration are also found in certain cases.
Sometimes, firms go for the reverse of combination. The process is manifest in different forms, such as divestitures, spin-offs and equity ...
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