Why merger take place, what are its basics

1. Questionno1: Why merger take place, what are its basics?
Answer: Mergers and acquisitions taking place for many strategic business purposes such as
financially with fewer budgets, strategically unable to capturing market share or with poor
management skills but the most common reasons for Mobilink and Warid are due to economic
reasons. Following are some of the few economic reasons:
Increasing capabilities: Capability cannot be a specific department, the capability can be come
from purchasing a specific and unique technology stand instead of than trying to spend time
and create by one company itself .in this case Mobilink is not having a 4G service, and Warid
can provide a 4G service. But, Mobilink can serve a broader coverage area, though Warid’s
signal coverage is smaller as comparison. Together Mobilink and Warid clients can take benefit
from combined 4G service operative under the new company.
Gaining a large market share: Mobilink and Warid decide to because they want to gain a better
distribution and marketing network. They want to expand into the different markets where a
same nature of company is already operational and merging with it, instead of start and
opening their own branches. By merging they will take the overall subscriber on base of the
merged entity to 45 million or 37% of the Pakistan telecom market, which counters at 121
million subscribers in September 2015.
Cut Redundancies: Increasing acquisition activities between telecom companies it is a desire to
cut and avoid redundancies. Most of the time two rival providers in a same local area both build
an infrastructure such as cell towers, and paying separate leases for same infrastructure.
Mergers can remove these redundant expenses and unite their facilities and customer base of
two competing companies. Now after merging Mobilink and Warid have Total numbers of
Towers: 13,000 Current Mobilink Towers: 8,000. Current Warid Towers: 5,000. (3G Towers:
3,600) (4G LTE Towers: 1,000). Currently Mobilink and Warid customers will be start using
same services, such as one single network, and one helpline.

2. Retaining Customers: In a highly competitive market it is very difficult to provide various
services due to increasing cost and attract and maintain customers, merger can be the only
option to provide greater service packages and supporting services will increase customer
satisfaction and it will keep the existing customers from going to or buying other company
services, with merger Mobilink can provide Delocalizing centers if a customer Cannot find a
warid Customer Service Center in a particular area, Now they will be able to try Mobilink
Customer Service Center.
Surviving: Every company is not willingly to give away its identity, but due to financial crises it
can be a single option for the company to survive or a giant competitor will forcefully acquiring
by gaining 51% of the company shares and taking control. But some of the companies doing
mergers and acquisitions to grow and survive the market such as Mobilink and Warid did, by
sharing their competencies, and successfully gaining 37% of the market shares.
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