Wealth maximisation is the main objective of financial managementand growth is essential for increasing the wealth of equity shareholders.The growth can be achieved through expanding its existing markets orentering in new markets. A company can expand/diversify its businessinternally or externally which can also be known as internal growth andexternal growth. Internal growth requires that the company increase itsoperating facilities i.e. marketing, human resources, manufacturing,research, IT etc. which requires huge amount of funds. Besides a hugeamount of funds, internal growth also require time. Thus, lack offinancial resources or time needed constrains a company’s space ofgrowth. The company can avoid these two problems by acquiringproduction facilities as well as other resources from outside throughmergers and acquisitions.
Mergers and acquisitions