21-01-2013, 12:46 PM
Mergers and Acquisitions, Featured Case Study: JP Morgan Chase
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Abstract
Mergers and acquisitions have become the most frequently
used methods of growth for companies in the twenty first
century. They present a company with a potentially larger
market share and open it up to a more diversified market. A
merger is considered to be successful, if it increases the
acquiring firm’s value; most mergers have actually been known
to benefit both competition and consumers by allowing firms
to operate more efficiently. However, it has to be noted that
some mergers and acquisitions have the capacity to decrease
competition in various ways.
The merger between JP Morgan Chase and Bank One
presented JP Morgan Chase with the opportunity to expand its
perspective through providing the firm with access to retail
banking markets and clientele in the regions where its
previous exposure had been virtually inexistent. The merger
gave the firm that extra growth and competitive edge that it
was looking for to compete with Citigroup and other rivals.
Research has shown, that due to increasing advances in
technology and banking processes, which make transactions,
among other aspects of business, more effective and
efficient, mergers and acquisitions have become more frequent
today then ever before.
The topic of mergers and acquisitions is extremely
complicated, with the numerous types of mergers that are out
there today. It is also remarkably interesting, with the
controversies and fierce price wars, which surround most
mergers and acquisitions.
In the world of growing economy and globalization, major
companies on both domestic and international markets struggle
to achieve the optimum market share possible. Every day
business people from top to lower management work to achieve
a common goal – being the best at what you do, and getting
there as fast as possible. As companies work hard to beat
their competitors they assume various tactics to do so. Some
of their tactics may include competing in the market of their
core competence, thus, insuring that they have the optimal
knowledge and experience to have a fighting chance against
their rivals in the same business; hostile takeovers; or the
most popular way to achieve growth and dominance – mergers
and acquisitions.
Mergers and acquisitions are the most frequently used
methods of growth for companies in the twenty first century.
Mergers and acquisitions present a company with a potentially
larger market share and open it up to a more diversified
market. At times, a merger or an acquisition simply makes a
company larger, expands its staff and production, and gives
it more financial and other resources to be a stronger
competitor on the market.