The most basic motivation of M & A is to seek the development of enterprises. Companies seeking to expand facing internal expansion and development through acquisitions two options. Internal expansion may be a slow and uncertain process,they have developed rapidly through acquisitions and more, even though it will bring its own uncertainty.

Specific to the theory, the most common motivation for mergers and acquisitions is - a synergistic effect (Synergy). Supporters of M & A transactions will usually reach some synergies as a reason to pay the price of a particular merger. Synergies arising from the acquisition, including - operating synergies (Operating Synergy) and financial synergies ( Financial Synergy ).

In particular practice, motivation acquisitions, summarized in the following categories:

1 expand production scale, reduce costs

Through mergers and acquisitions, corporate scale was expanded to be able to form an effective scale . Economies of scale can bring full use of resources, and fully integrate resources, reduce costs in all aspects of management, raw materials, production, thereby reducing the total cost .

2. Improve market share , enhance the industry's strategic position

Large-scale enterprises, with productivity improvement, sales networks improve, the market will have a relatively large share of the increase. Thus establishing corporate leadership in the industry.

3. Obtain sufficient raw materials and cheap labor, and enhance the competitiveness of enterprises

Scale enterprises through acquisitions to become the raw materials major customers , can greatly enhance their ability to negotiate , so as to get cheap business production may provide. At the same time, efficient management, human resources and visibility underutilized businesses have helped companies reduce labor costs. Thereby improving the overall competitiveness.

4. Implementation of brand management strategy, enhance their visibility, to obtain excess profits

Brand value is the driving force, the same product, or even the same quality, brand-name value is much higher than ordinary products. Mergers and acquisitions can improve brand awareness , improve their products added value, gain more profits.

5 To achieve the strategic development of the company through mergers and acquisitions to obtain advanced production technology and management experience, business networks, and other resources professionals

M & A activity is not only the acquisition of the assets of the enterprise, but also won the acquired company's human resources , management resources , technical resources , marketing resources. These have helped fundamentally improve the overall competitiveness of the company's development strategy to achieve a great help.

6 entered through the acquisition of new business, the implementation of the diversification strategy , diversify investment risks

This occurs in a mixed acquisition mode, as competition intensifies, companies through investment in other sectors, not only can effectively expand enterprise business scope , access to a wider range of markets and profits, but also because of the competition with decentralized the increased risk.