What are the Benefits of Mergers and Acquisitions?

Question

What are the benefits of Mergers and Acquisitions on all levels of the spectrum: to stockholders, to the industry/market, to the firms themselves, etc.

Please explain why and cite examples if possible --> I WILL choose a best answer!

Answer 1

Best Answer - Chosen by Asker

The simplest, cut expenses and gain market share. When you cut expenses and gain market share profit increase, higher dividens (if listed) and higher stock value.

e.g. Microsoft bought hotmail.
They cut the expense of developing their own internet based customer, which may have cost more time and money had they done it themselves. At the time Hotmail had millions of users which became Microsoft users when it was bought over. Microsoft had a few million additonal users which they have direct access to. Plus the revenue from advertising, etc.

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Asker's Comment:

thanks!