External (Inorganic) Business Growth Flashcards

All 4 cards in this deck

What is external (inorganic) growth?

Growth achieved by joining with another business, through a merger or a takeover.

What is a merger?

Two businesses agree to join together to form one new, larger business.

What is a takeover?

One business buys a controlling interest (over 50% of the shares) in another business.

Give one drawback of growing by merger or takeover rather than organically.

Competition laws may prevent further merger and takeover activity, constraining growth.