• The most common reason for firms to enter into merger and acquisition is to merge their power and control over the markets.
• Another advantage is Synergy that is the magic power that allow for increased value efficiencies of the new entity and it takes the shape of returns enrichment and cost savings.
• Economies of scale is formed by sharing the resources and services (Richard et al, 2007). Union of 2 firm’s leads in overall cost reduction giving a competitive advantage, that is feasible as a result of raised buying power and longer production runs.
• Decrease of risk using innovative techniques of managing financial risk.
• To become competitive, firms have to be compelled to be peak of technological developments and their dealing applications. By M&A of a small business with unique technologies, a large company will retain or grow a competitive edge.
• The biggest advantage is tax benefits. Financial advantages might instigate mergers and corporations will fully build use of tax- shields, increase monetary leverage and utilize alternative tax benefits (Hayn, 1989).