Merger versus IPO or Acquisition Essay Example | Topics and Well Written Essays - 500 words

Merger versus IPO or Acquisition - Essay Example However, the company is bound by regulatory restrictions to seek prior permission to conduct this exercise; a permission that might be granted or otherwise rejected under strict terms of engagements. Another threat lies in the management of the many stocks. The company may get locked up in meeting the expectation of the public market both in the short term and into the unforeseeable future before embarking on a meaningful journey of expansion (Burton & Prasad, 1997). Kudler Fine Foods also has the option of expanding its operations through mergers or opting to acquire another firm within its line of operations. Noteworthy, these two options possess more or less similar opportunities and challenges. In fact, the special alchemy of a merger and/or an acquisition is that a combined effort is greater than the sum of individuals’ efforts (King, Slotegraaf & Kesner, 2008). Accordingly, it would be more valuable for Kudler Fine Foods to seek the services of another company than function as an individual entity. Merging with a company offering delivery services has the possibilities of giving Kudler Fine Foods a competitive advantage over other similar businesses in the market. Additionally, such a combined effort would set the company on a cost saving path related to the management of the delivery services of its food delicacies. Whichever option between a merger or an acquisition, the resultant company would give Kudler Company a synergetic com petitive strength to function efficiently and the capacity to acquire a greater market share with a re-doubled effect of generating more revenues. On the negative side, mergers and acquisition provide narrower market opportunities compared to an IPO. They are not only less efficient in market pricing, but they may also result into one or both parties losing vital control of key operational elements