It is the inherent desire and need of every business to grow both vertically and horizontally. Organic growth, that is development from within, is often slow and sometimes difficult. That is why there is an increasing trend towards mergers and acquisitions. It could be called an instant expansion.

Many big corporations are continuously on the lookout for potential targets for mergers or acquisitions. Some even have a core cell or a senior person concentrating on this aspect. Depending on the company's policy, which may be to diversify or to expand in the same field, add complementary business activity, or to strengthen research facilities, they continuously scan the business world. Normally they report directly to the decision-making authority.

Sophisticated but simple-to-use software that can handle financial analysis, projections, valuations, and so on is available to help them. Quite often, the assistance of analysts, investment bankers and lawyers specializing in the field is sought. In fact, these professionals are likely to have their own frequently updated list of businesses ready for takeover. Sometimes the services of investigators are utilized to gather intelligence on the background and personal details of the promoters and senior executives of the target company.

Once the victim is identified, the next stage is to decide whether a negotiated deal is possible. The alternative is a hostile takeover where the stock of the company to be acquired is bought quietly through a third party. Investment bankers and other professionals play an important role in both these methods. The process is managed confidentially.

Sometimes there is a reverse situation. A businessman may want to exit from his field for whatever reason. The ideal step for him would be to contact an investment banker or consultant who can find a buyer. Normally, all merger and acquisition moves are kept secret until an agreement is reached.