Business combinations

Also known as: Corporate connection

Der Begriff „Unternehmenszusammenschlüsse“ beschreibt den Prozess, wenn aus rechtlich und wirtschaftlich selbstständigen Unternehmen größere Business entities gebildet werden, um darauss wirtschaftliche Vorteile zu erlangen.

Definition / explanation

A company merger is named after a deeper cooperation between several companies. This merger can take place without giving up independence (cooperation) or with the complete or partial abandonment of entrepreneurial independence (concentration).

Concentration, on the other hand, denotes a (partial) abandonment of entrepreneurial freedoms and the associated assumption of sovereignty over entrepreneurial decisions by another company. Concentration is at least as widespread as cooperation, but in different forms and forms. It therefore makes up the larger sub-area in the theory of corporate mergers in economics and is thematically much broader.

example - Practical examples of cooperation would be large public projects or similar undertakings that could not be managed by one company alone.

Objectives and problems

Every business combination has to meet predefined goals. In general, they can be divided into the following three categories:

  • growth
  • Increase in profitability
  • Mitigation of the risk

Of course, one goal often overlaps the other and the individual requirements of the environment require a precise analysis of the potential strengths and weaknesses (SWOT analysis) of the consequences of a merger in advance.

The most common problems that can arise in the context of a cooperation and also in the context of a concentration are due to the nature of the market. the Term "cartel" describes in rough words the consequences of a merger of several companies into one strong and dominant power.
For this reason, cooperations and concentrations are in almost all cases subjected to a state examination by the Cartel Office.

Definition of terms: control vs. fusion

Concentration inevitably leads to a situation in which a company has to give up part or all of its independence. While in the first case there is talk of control and a domination agreement has to be concluded, the second case describes the classic merger in which two or more companies merge with one another.

This merger either leads to a completely new company or the acquired companies become fully owned by the “stronger” company. Here, “stronger” does not necessarily mean “better”, but rather reflects factors such as brand awareness, infrastructure and economic strengths.

There are also different constellations within the framework of mastery. Basically, it is currently the case that companies can choose the manner of handling themselves and specify them in a contract. Common scenarios are profit transfer agreements or the transfer of powers.


  • Business combinations can take place through collaborations or concentrations
  • Objectives: growth, increasing profitability and minimizing risk
  • Business combinations involve a risk due to the formation of cartels with a dominant position
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