Why are there an increasing number of mergers with companies in different industries?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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There are more and more mergers between companies in different industries today because many companies believe that they can benefit from merging to make larger companies.  There are instances in which the mergers are between companies that feel they can help one another because their businesses are complementary.  For example, you could have a bank and an insurance company merge with one another because their products could appeal to the same kinds of people.  In other cases, one firm may feel that it can benefit from being associated with the other firm’s name even if they are in very different industries.  The tendency towards globalization also helps to drive this process as bigger firms become the norm. 

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