What is the main purpose of a merger and acquisition?

The purpose for which a company pursues a merger and acquisition (M&A) lies not in a simple sale of a business, but in a strategic choice for long-term growth and enhanced competitiveness.

In particular, for small-to-medium and venture enterprises, a merger and acquisition is used as a practical means that simultaneously considers the survival and development of the company.

First, from the seller's perspective, an M&A becomes a choice for maintaining the company's value and sustaining the business when limits arise in operating the company due to the aging of management, the absence of a successor, stagnant growth, and the like.

Rather than a simple closure of the business, it functions as a means of transferring the business and employment to an entity capable of acquiring the company.

On the other hand, from the acquirer's perspective, the main purposes are expanding market share, strengthening competitiveness, securing technological capabilities, and diversifying the business.

By acquiring a competing company or a company that holds technology, one can pursue growth within a short period and can also expect cost savings and productivity gains resulting from the increase in company scale.

Ultimately, you may regard a merger and acquisition as a management decision that comprehensively reflects the company's current situation and future strategy.