Is where one company takes over another by buying 51% of its shares. As a result they gain the major control of firm. The seller will want as much as possible for the business & the buyer will want to pay as little as possible. The actual price will be somewhere in between.
Where two firms come together to run their businesses as one. A merger is very like a takeover, but the main difference is that a merger is usually more friendly arrangement.
This involves two or more firms combining their skills & resources in a particular line of activity. Alliances are popular because the companies co-operate with each other in relation to market information, new technology, human resources etc.
Advantages of Alliances
- easy to establish
- each firm benefits from the expertise of the other firms
- there is an improved image of the firm if it joins with other well known companies