Strategies of acquisitions and mergers are based on synergy between firms that can create value for shareholders. Synergy can be identified in many ways depending upon business rules and industry rules. Mostly, synergy as estimated by strategists is hard to achieve in its full scale. Which is the reason why some takeovers are not successful. But if properly materialized then companies/businesses prosper in the long run. Simply put, achieving synergy means competing better. 

From the standpoint of individualized strategic approaches to international mergers and acquisitions, five strategies used by international companies initiating such deals are popular among industry players.

Strategy 1 - Overcapacity Strategy(Daimler-Benz and Chrysler merger)

When firms from fertilizer, cement and Automobile sector reach to full plant production capacity and want to meet additional demand for their products tend to expand through acquiring similar nature target companies production plants for enhancement. This strategy is based on elimination of production capacity problems. Acquirer is planning to increase its market share by producing more and selling more. And also improve operational efficiency, solving certain business functions and business process duplication problems. 

Strategy 2 - Differentiation strategy(Snapple takeover by Quaker Oats)

The acquiring company discovers that its distribution and advertising processes are absolutely suitable for the target company's product line. Hence, make its move for acquiring existing product line of the target company or rights to use thereof. It is carried usually between large companies implying expansion of business activity of the acquiring company not only on the scale of neighboring cities or states (as administrative regions), but also countries.  Problems with the business processes integration and adoption of new values by both parties to the agreement are much more acute than in Geographic Roll-up M&A's. 

Strategy 3 - Geographically-competitive strategies(Taking over a large number of local and regional banks by Banc One in 1980s)

Many industries exist for a long time in the state of fragmented representation, i.e. local business does not go beyond local scale, and no company becomes dominant on the national and/or regional scale. Eventually, companies applying effective strategies of their own business development, resort to geographical expansion by acquiring smaller competitors within adjacent territories. This process is called "roll-up". At that, production units becoming property of the acquiring company, do not change their location in case it is crucial for maintaining relationship with customers/clients. For a smaller local target company the "roll-up" agreement may yield the following advantages: opportunity of following corporate culture and approaches to business activity of the national/regional industry leader, access to the capital and nationwide product/services sales network, gaining access to the advanced technologies and developments, as well as solving certain problems of competition with larger companies. 

Strategy 4 - Innovation strategy(Takeover of 62 companies by CiscoSystems)

Motivation behind innovation strategy is expansion of existing technological developments and innovations (as an alternative to R&D within the company). For target company such agreements can be beneficial in terms of significant investment influx that will contribute to its strengthen position and competing with the industry giants (as an alternative to direct competition doomed to failure). It is carried usually between high-tech companies (including IT-companies) and companies of the biotech and pharmaceutical fields. The main motive for participating in such agreements is the goods life cycle reduction. 

Strategy 5 - Intersectoral convergence strategy(Takeover of Paramount and Blockbuster by Viacom)

The hypothesis guiding the acquiring company/initiating company in this case is as follows: the greatest synergy can be achieved through takeover of resources from the existing sectors whose boundaries disappear, and use thereof for creating a new sector/business. Success of such M&A deals depends not only on how successful acquisition or integration is but also on the correct assessment of the newly formed sector boundaries. Purpose and objectives of such deals are becoming leader in the emerging promising sector and becoming founder and leader of the new sector by means of successful M&A deals.