Benefits of Mergers and Acquisitions are manifold. Mergers and Acquisitions can generate cost efficiency through economies of scale, can enhance the revenue through gain in market share and can even generate tax gains.
 

Benefits of Mergers and Acquisitions are the main reasons for which the companies enter into these deals. The principal benefits are as following:

1)  Mergers and acquisitions often lead to an increased value generation for the company. It is expected that the shareholder value of a firm after mergers or acquisitions would be greater than the sum of the shareholder values of the parent companies.
 

2)  An increase in cost efficiency is effected through the procedure of mergers and acquisitions. This is because mergers and acquisitions lead to economies of scale. This in turn promotes cost efficiency. As the parent firms amalgamate to form a bigger new firm the scale of operations of the new firm increases. As output production rises there are chances that the cost per unit of production will come down.

3)  An increase in market share is one of the plausible benefits of mergers and acquisitions. In case a financially strong company acquires a relatively distressed one, the resultant organization can experience a substantial increase in market share. The new firm is usually more cost-efficient and competitive as compared to its financially weak parent organization.

4)  Mergers and Acquisitions are also beneficial:

●  For industry know how and positioning

●  To lower cost of operation and/or production

●  When a forms wants achieve administrative benefits

●  For Financial leveraging

●  To gain higher competitiveness

●  When a firm wants to enter a new market

●  To increased market share

●  When a firm wants to introduce new products through research and development

●  To improve profitability and EPS

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