Acquisitions are generally strategic moves made by a company to bolster its position within an industry

Acquisitions are generally strategic moves made by a company to bolster its position within an industry. Some buyers want to acquire new capabilities that would otherwise take years to build, others want to enter different markets or introduce new product lines. Sometimes, if regulators allow, companies also acquire their competitors as a means of consolidating their position in a market.

These deals are typically done with the intent of mutually maximizing shareholder value. The acquired company’s shareholders hope to benefit by selling at a premium, while the acquiring company’s shareholders want to own a piece of a more powerful and competitive firm. This applies even to Musk and his shareholders in this deal who, although a loose collective rather than a company,

 

 

 

 

 

 

 

 

  the other hand, if Musk does not buy Twitter, the current shareholders may see market capitalization (or the value of all shares) slide further. It is highly unlikely that in the current economic climate there are any other contenders who would be willing to pay Musk’s original price for Twitter. This is why Twitter management is aggressively pursuing a legal route as the only realistic option to maximize return for its shareholders. If the deal does go through they will not have to deal with the ramifications of managing a disgruntled workforce, however, unlike Musk.