May 29, 2014

When considering an acquisition, many factors come into play

There are many reasons that could lead a company to want to acquire another company. Sometimes the deal is to acquire technology. Other times it may be for talent assets. Whatever the reasons, when large acquisition deals happen it can lead to speculation in the industry about why the two companies entered into the deal.

A recent example of this is the deal between Apple and Beats Music. According to many news reports, there are several reasons that factor into Apple's motivations behind the deal. With the rise of cloud-based streaming music services, Apple may be interested in Beats for its streaming music capabilities, and the company may be looking to expand into this area, according to Tech Crunch. 

According to a Business Insider article, the official deal may be announced this week. As numerous considerations factor into an acquisition deal, Apple has reportedly dropped the price from its initial offer of $3.2 billion, changing it to $3 billion, the New York Post reports

Talent is said to be a factor in this deal, as Beats' Dr. Dre and Jimmy Iovine could possibly go on to join Apple. Not only would Apple be getting a popular headphone company, but the streaming music services and talent that go along with the deal are other variables at play, as Forbes details, this could also include a "cool factor" that Beats would bring.

All businesses should consider the motivations and potential gains that could come from a merger or acquisition. Whether a deal is primarily for talent, technology or other assets, companies looking to determine the value of their business may benefit from consulting with a M&A advisor that will help them figure out the best acquisition strategy