Successful in Utilizing the Merger and Acquisition Strategy

CORPORATE STRATEGY
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Table of Contents TOC \o "1-3" \h \z \u Case Study Question 1 PAGEREF _Toc66988600 \h 3Introduction PAGEREF _Toc66988601 \h 3CRH’s Strategy PAGEREF _Toc66988602 \h 3M&A and CRH’s Success PAGEREF _Toc66988603 \h 4Conclusion PAGEREF _Toc66988604 \h 5Case Study Question 2 PAGEREF _Toc66988605 \h 6Introduction PAGEREF _Toc66988606 \h 6Recommended Corporate Strategy PAGEREF _Toc66988607 \h 8Conclusion PAGEREF _Toc66988608 \h 9References PAGEREF _Toc66988609 \h 10
Case Study Question 1
Introduction
Mergers and acquisitions are core components and strategic management and corporate finance. Both are technical terms that describe the consolidation of companies. A merger describes a strategic move where two companies combine to form a unit. On the other hand, the acquisition process describes strategic processes where one company purchases another or completely observe another. Merger and acquisition (M&A) strategy is a complex process that involves many parties and thus requires sufficient preparation, analysis, and deliberations (Johnson et al., 2017, 341). When these processes are carefully followed, companies involved in M&A stand to benefit from the strategy significantly. CRH plc is among the companies that have successfully and successively utilized M&A strategy to propel its growth and rise to global leadership in the building materials industry.
CRH’s Strategy
CRH has utilized a merger and acquisition strategy for decades. As evidenced from the case study, the group’s foundation has its roots in a merger that happened in 1970. The Group resulted from a merger between Irish Cement Limited and Redstone (Moroney, 2014, 706). Over the years, CRH has made M&A its main strategy of expansion. The group has perfected the strategy to the extent of developing an elaborate process for use while merging or acquiring another company. The M&A strategy has also been successfully integrated with CRH’s business model. As Moroney 2014 asserts, acquisitions play a significant role in the five key components of CRH’s business model (708). For instance, the Group uses acquisitions to keep its portfolio balanced. This function is achieved through acquiring legacy businesses that can easily be reinforced to significantly add to the overall balance of the Group’s portfolio.
The acquisition strategy is in some instances affected by integration difficulties. Some of such difficulties emerge from a lack of enough information regarding the operations of the company targeted for acquisition. Over the years, CRH has developed a comprehensive acquisition strategy that prevents the Group from experiencing difficulties. One of the notable characteristics of CRH acquisition strategy is the network of teams spread around the world for the purposes of identifying potential acquisition targets. This strategy has proven useful with regard to a comprehensive evaluation of a company before the acquisition process.
As Johnson et al., 2017 assert, one of the issues that prevent successful corporate acquisitions is having managers of the acquiring company spend a lot of time appraising the ta...