How Strategic Alliances Help in Mergers and Acquisitions 

21jun5b

While strategic alliances and mergers are both forms in which two companies join forces to achieve a new and common goal, the two strategies are different in many ways. One of the most important differences is that in a strategic alliance, the participant companies do not merge to create a new legal company. Each of the participants preserves their identity, sharing only their resources to achieve a common goal. On the other hand, mergers and acquisitions involve creating a new company that incorporates the merging parties.

Informed M&A consultants confirm that strategic alliances and mergers are different in terms of the form of collaboration. Still, a strategic alliance that proves to be profitable for both parties can be transformed into a merger at any time. If a merger is what seems to benefit both parties in the relationship, the deal is much easier to conclude between two companies that already know each other. Suppose two companies that know each other and have been successfully collaborating for a long decide to fuse. In that case, the merger is likely to be more successful, with many well-known pitfalls, such as higher employee turnover, being easier to avoid, and a higher overall success rate.

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