Reasons for forward merger and takeover
- Secure factories and outlets
e.g if your in primary buying secondary and territory ;secondary must have factories because they make and territory just sell so they must have shops therefore taking ownership of factory and shop means they can put their products as priority in their shops and will the factories will be making more of your products .Fore example Jd and nikes influence them what to do ,say stop selling gola in jd .Therefore you can give them instrustions what to do and to make more of your products more of importance .
- more contacts/links
- more publicity
This means the business will get more advirtisement .For example a buying b was big news. Therfore higher sales ,profitsand market share .
Reasons for backward merger and takeover
- secure supplies ->cheaper
E.G when Tesco when straight to primary bought out farmers them farmers to work for them .So if tesco buys them then all the e.g milk will go to tesco ,therefore stock levels will always…