The Advantages of Company Mergers

Mergers happen when two businesses join together to create a single, unified company. Business owners may enter into merger negotiations for a variety of reasons, with mergers generally happening between large and small companies. A small, struggling business might become absorbed by a large conglomerate. Two large companies may join forces to become stronger.

The main benefit of mergers to the public are:

1. Economies of scale. This occurs when a larger firm with increased output can reduce average costs. Lower average costs enable lower prices for consumers.

2. International competition. Mergers can help firms deal with the threat of multinationals and compete on an international scale. This is increasingly important in an era of global markets.

3. Mergers may allow greater investment in R&D This is because the new firm will have more profit which can be used to finance risky investment. This can lead to a better quality of goods for consumers.

4. Greater efficiency. Redundancies can be merited if they can be employed more efficiently. It may lead to temporary job losses, but overall productivity should rise.

5. Protect an industry from closing. Mergers may be beneficial in a declining industry where firms are struggling to stay afloat.

6. Diversification. In a conglomerate merger, two firms in different industries merge. Here the benefit could be sharing knowledge which might be applicable to the different industry.

minamargroup.com
investorrelations.mmg@gmail.com

 

 

Benefits of IPO

There are various reasons why a company should consider an IPO.

 

Company will gather a significant amount of funds by opening up to the public and allowing shares to be traded in an organized market.

 

Benefits of IPO:

— Financing
— Liquidity
— Recognition
— Institutionalization
— SPOs
— Credibility

Financing
Public offering primarily provide companies the opportunity to obtain capital through a reliable organized, transparent market structure.

 

Liquidity
The shares offered to the public can be bought and sold in a transparent manner at the prices determined according to the market supply and demand at an arbitrary time, liquidity is provided to the shares and an important opportunity is provided to existing shareholders.

 

Global Recognition
Various information about the companies whose shares are traded on the Exchange are constantly being delivered to the foreign investors through global press, data broadcasting and other visual broadcasting organizations within the framework of the transparency of the Exchange and the function of public disclosure.

 

Institutionalization
Being publicly traded adds to a company’s stature as an institution, which can enhance its competitive position.

 

Secondary Offerings
Companies can create financing opportunities not only with the primary public offering but also with “Secondary Public Offerings” according to the resource requirements arising from their investment and similar needs while restricting the pre-emptive rights of existing partners.

 

Credibility
Listing their shares in the Exchange, companies increases their credibility in banking and money market which enables to obtain loans cheaper and easier.

 

minamargroup.com

investorrelations.mmg@gmail.com

Importance of Investor Relations

Investor Relations combines finance, communication, and marketing to effectively control the flow of information between a public company, its investors and its stakeholders.

It’s of the utmost importance for companies to maintain strong, transparent relationships with investors. Because of this in companies Investor Relations department comes into play.

Some of the main goals of investor relations are:

  • Enabling the company to achieve the optimum share price of the company that reflects fundamental value
  • Representing Company to investors and vice versa
  • In a timely and accurate way to provide financial information to investors
  • Building receptive capital markets for future financing at favorable terms

Benefits of Investor Relations Team

  • Maintaining loyal shareholder base
  • Enhancing long-term shareholder value
  • Ensuring receptive capital markets for future financing
  • Lowering the cost of capital
  • Building long-term credibility with the investment community

Because IR fulfills so many duties and functions in so many capacities, it’s essential that the department stay fully integrated with nearly every other department in the company, such as the legal and accounting departments, as well as with the entire executive management team.

minamargroup.com
investorrelations.mmg@gmail.com

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