In the world’s most popular economic system of capitalism, businesses compete with one another in hopes of accumulating greater wealth than their competitor counterparts.
Competition is, in all regards, official name of the game when it comes to capitalism. Economic competition effectively drives prices lower for consumers, gives the world better products and services, and gives consumers more providers to do business with.
Sometimes, businesses join corporate hands with one another through mergers or acquisitions to share the benefits offered by working as single units, sharing customer lists, market penetrations, facilities, human capital, credibility, and everything else associated with doing business.
Mergers are hallmarked by two or more businesses joining forces without dissolving either entity. In essence, the two groups combine with one another to create a better, faster, stronger organization.
Acquisitions are deals in which one company offers compensation to the owners and shareholders of a smaller business, typically in the form of shares of stock, by which the smaller business almost always loses its likeness, simply becoming one with the parent company.
Mergers and acquisitions are more common than one might think, with the total value of all such deals amounting to $1.46 trillion in 2016, including roughly 2,500 transactions in which deals were worth a minimum of $10 million.
Spring and T-Mobile Merged Forming A Telecommunications Giant
The United States mobile phone market has been largely dominated by four companies for some years: AT&T, Verizon, T-Mobile, and Sprint.
T-Mobile and Sprint have trailed the former two telecommunications players in market share since their respective inceptions. Instead of further competing with one another, why not join together in hopes of disrupting the status quo of who’s who in the world of American cellphones?
Although appropriate United States governmental regulatory bodies are still required to sign off on the $26-billion-dollar transaction, consumers should start rejoicing in the name of better service that’s soon to come.
Here’s What It Means
Service on the new company’s networks will likely exceed that of both T-mobile and Sprint, collectively.
It’s likely that the two companies could offer both Netflix and Hulu subscriptions free of charge on qualifying plans. Unfortunately, however, although both companies have agreed to offer lower prices than their two competitors, current T-Mobile unlimited subscribers could end up forking over more for the same plan they currently get.