Inorganic growth is can help a company grow by joining two or more business together. There are two different ways of accomplishing this, mergers and takeovers. Mergers occur “when two firms join by agreement” making it possible to “share the resources of the two organisations and focus on the best activities of each” (Growing a company by international acquisition, n.d.). A takeover is form of acquisition, it occurs when a company buys a minimum of 51% of the shares of another company, enabling it to control (and own) the other business and choose which parts of the acquired business to keep or get rid of ” (Growing a company by international acquisition, n.d.). Within inorganic growth there are also two ways to integrate the companies, vertical and horizontal integration. Vertical integration joins businesses which are at …show more content…
There are linguistic differences, cultural differences as well as a different currency, to contend with. Language differences can lead to confusion. Behaviour and business practices, as well as laws and regulations, can differ between the UK and the EU markets, therefore is why to be informed of these differences and to respect them. Conversions between the Pound and the Euro can also make business more differences due to fluctuations in the values which can affect profits. All of these reasons could have lead the Davis Service Group to embark on the acquisition of Berendsen through horizontal growth. Berendsen was already well established in the EU markets, had navigated issues of culture and language, and the countries in which Berendsen operated already used the Euro or had currencies linked to the Euro. All of this put the Davis Service Group into a much more favourable position than if it had entered the EU markets on its