Business Organizations are established to achieve certain corporate objectives including corporate growth and increases in profitability. Growth is a major yardstick by which the success of a business firm is measured. Given that business organizations operate in a dynamic macroeconomic environment such growth is threatened in periods of volatile economic instabilities. The resultant effect of the recent world economic meltdown is a financial crisis among corporate organizations. One strategy open to corporate organizations during the periods of economic crisis is Merger and Acquisition. Companies have been combining in various configurations since the early days of business. Nevertheless, joining two companies is a complex process because it involves every aspect of both companies. For instance, executives have to agree on how the combination will be financed and how power will be transferred and shared. Also the companies must deal with layoffs, transfers, changes in job titles and work assignments etc. The most popular forms of business combination are mergers, acquisition and consolidations. Merger and acquisition is at its infancy stage in Nigeria compared with other developed countries. Merger and Acquisition is an important concept that contributes to the growth of a national economy through increase in productivity and profitability. More so, mergers and acquisitions can make companies stronger by expanding their consumer base, reducing marketplace competition and creating value that is greater than each company offers individually.
MERGERS AND ACQUISITION
A merger refers to the combination of two or more organizations into one larger organization. Such actions are commonly voluntary and often result in a new organization name (often combing the names of the original organizations). A Merger can also be said to be a transaction involving two or more companies in which shares are exchanged but in which only on company survives. A merger entails the coming together of two or more firms to become one big firm. Thus, one can conveniently refer to a merger as the mixing of entities resources for growth and renovation.
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Acquisition is the purchase of one organization by another. Such actions can be hostile or friendly and the acquiree maintains control over the acquired firm. Acquisition is the purchase of a company that is completely absorbed as an operating subsidiary or division of the acquiring company.
Acquisition is the taking over or purchase of small firm by a big firm, both of which are pursuing similar motives. Acquisition is an act of acquiring effective control by one company over assets or management of another company without any combination of companies. Thus, in acquisition two or more companies may remain separate legal entities but the control of companies resides in one place.
REASONS/BENEFITS OF MERGER AND ACQUISITIONS
i. Income Enhancement: A firm may discover that despite all effort on its side a strong sustainable and profitable competitive position cannot be produced without a change in the share of the market. A fundamental reason for acquisition is the desire to enhance income. A combined company may generate greater income than two separate companies. Increased income may come from improved marketing, strategic advantage, monopoly power and increased market share. As regards to marketing, a merger can bring about a significant improvement in previously ineffective media programming and advertising efforts , a weak existing distribution network and an imbalance product mix.
ii. Improve the value of Securities: Large growing firms have earnings capitalized at lower rates, which produces higher market values. The stock has better marketability, thus reducing risk and allowing for higher price earnings ratio.
iii. Synergy: This is yet another reason for merging. This is a situation where the product of the merger is in the excess of the value of the aggregated value of the entire firm considered together. This is often referred to as the two plus-two equals five effect. It also implies when a firm acquires another firm in the same industry, a lot of duplicated activities in the marketing research, purchasing and administrative areas. For example financial benefits can be achieved in a merger between airlines by eliminating the duplication of existing facilities and runs. In an industrial organization, synergism can occur not only with elimination of duplicated operations but also with a rounding out of the product line in the hopes of increasing the total demand for the product of both companies.
iv. Economic of scale: The concept of economics of scale can be defined as being realized when the firm is operating at or close to the minimum point of its average cost curve. Similarly, economics of scale occur when average cost declines with increase in volume. Economics of scale are possible not only in production, but also in marketing, purchasing, distribution, accounting even finance the idea is to concentrate a greater volume of activity with a given facility into a given number of people into a given distribution system etc. that is increase in volume permits a more efficient utilization of resources.
v. Use Excess cash: A company might find itself with more cash than it requires presently in business operations. It then looks for another business to buy. This is necessary because cash in sterile and its proper use is not made of such excess cash, the company might find itself over capitalized. It is widely argued that the only true justification for a merge is to achieve operating economics when the objective of the firm is to maximize the wealth of the shareholders.
MERGERS AND ACQUISITION AND BUSINESS GROWTH
In the world of business, merger and acquisition constitute a powerful growth tool used by companies to achieve long term growth and increased revenue or profitability. Synergy created by related merger and acquisition positively influences the profit streams of the firms. It is believed that profit of firms tend to increase in relation to the degree of relatedness of companies in merger and acquisition activities. Mergers and acquisition fail to make positive contribution in respect of return on capital employed. Corporate acquisitions are the effect of good performance rather than the cause. However, acquisition also drives performance and growth. Merger and acquisition provide the faster ways to achieve growth or capitalize the firms accumulated assets in order to attain critical mass and strategic positioning. In making its entry decision, a profit- oriented firm would always compare the desirably of entry by internal means and entry by acquisition and then choose the means consistent with its corporate objectives of sustaining organization/business growth.
CONCLUSION
In conclusion, when two firms merge together as one it will lead to lowest cost of capital, for instance, a big name is perceived by investors as financially balanced, may raise funds at lowest cost as a result of merging, the size will give the opportunity for rational diversification for the purpose of risk reduction. Whenever two firms merged together as one such merging will lead to a large firm since large firm have a greater degree of market influence than small ones, hence this larger firm will have monopoly power. Large scale production may lead to elimination of competition leading to increase sales. The good will of the company acquired can be enjoyed by the new owner; this will also lead to savings in the amount of money spent on fixed assets (capital expenditure).

Hello, friendly acquisitions occur when the target firm agrees to an acquisition and its board of directors approves it. Friendly acquisitions often work to the mutual benefit of the acquiring and target companies. Both companies are developing strategies to ensure that the acquiring company acquires the relevant assets and reviewing the financial statements and other estimates of liabilities that may arise from the acquisition of these assets. The deal closes when both parties agree to the terms and meet all legal requirements. You can learn more about the Institute of Mergers and Acquisitions thanks to the information m&a databases https://imaa-institute.org/resources/ they also have details about alliances, where everything is described in detail, it will definitely come in handy for the future.