There are several reasons why companies might pursue a conglomerate merger:
1. Diversification: By merging with a company in a different industry, businesses can diversify their product lines and reduce risks associated with market fluctuations. 2. Market Expansion: Conglomerate mergers can provide access to new markets and customer bases, enhancing growth opportunities. 3. Resource Sharing: Companies can share resources, including technology, expertise, and management skills, leading to improved efficiency. 4. Financial Synergies: The combined financial strength of the merged entities can enhance borrowing capacity and reduce the overall cost of capital.