There are several reasons why companies might engage in a market extension merger:
- Geographical Expansion: Companies can extend their reach into new territories, thereby increasing their market presence and revenue potential. - Diversification: By entering new markets, companies can reduce their dependency on a single market, mitigating risks associated with economic downturns or market saturation. - Economies of Scale: A merger can result in cost savings through shared operations, streamlined processes, and bulk purchasing. - Synergy Realization: Combining strengths and resources from both companies can lead to improved efficiency and innovation.