Overview of SME M&A

 Overview of SME M&A M&A among SMEs is still relatively relatively rare. Many business owners do not know how to go about selling their business or buying another SME. However, things are starting to change as data from a recent study conducted by he !usiness imes and A"#A $oint to a rising trend among Singa$ore SMEs combining to f orm bigger SMEs. %n ''( there were only ) mergers com$ared with *+ cases in ''. Almost half hal f of the mergers were in the wholesale-retail and manufacturing industries. One interesting $oint to note is that many of these M&A involved the merger of a subsidiary with its $arent com$any, or the merger among related subsidiaries under the same grou$. hus the actual M&A among non related rms may be be much less $revalent. !enets of M&A for SMEs  here are many benets benets for SMEs to undergo M&A. he ob/ectives and benets often fall into these categories0 a1 E2$and E2$and mark market et shar share e and reven revenue. ue.  3or a new "EO taking over, one of the fastest ways to show results is via taking over another com$any to add to its to$ line. Organic growth may be too slow. b1 "ash "ash out out and and ret retir ire. e. 3or SME owners whose children do not want to carry on the family business, selling the rm can be an attractive e2it o$tion. c1

4iversify 4iversify the core core business business and and broaden broaden $roduct $roduct o5erings o5erings..  his is often a good hedge to ensure a constant constant revenue stream stream against business cycles of one industry. industry. 3or com$anies who do not want to s$end the time and resources to develo$ new $roducts, ac6uiring another com$any is a good solution. 7aw rms have also been shown to takeover another smaller law rm with uni6ue s$eciality skill sets that the ac6uiring rm lacks.

d1 #emove emove key key com$et com$etitor itors. s. %f you cannot beat them, buy them out8 Singa$ore9s own bread market saw its fair share of this with the dominant $layer buying out its i ts strongest com$etitor. e1 :ain :ain new techno technolog logical ical e2$e e2$erti rtise. se.  he ac6uisition of ;olvo ;olvo cars by "hina9s