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Business Quote by Victor Cheng

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““The most common M&A cases center on either strategic value or cost savings. The premise of a strategic value deal is that the combination of the two companies creates something more than either company could achieve on its own. A classic example of such a transaction is when Company A, a huge company with the biggest sales force on Earth, wants to acquire Company B, a small company that has a hot, brand-new product but very limited sales distribution. The rationale is that you move the product from Company B to Company A, let the large sales force work its magic, and boom! The new company has the hottest product on the market and the best distribution. In the cost savings deal, the new company combines the two companies in order to “eliminate” a negative (in this case, costs).””

Victor Cheng

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