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Deep Pocket Merger
A hypothetical term referring to mergers where the acquirer has significantly more financial resources than the target, influencing negotiation dynamics.
Implications
A strategy where a financially stronger company acquires or merges with a weaker company, often to consolidate market power, eliminate competition, or gain valuable assets at a lower cost.
Example
Example: A large tech company executes a deep pocket merger by acquiring a struggling startup with valuable intellectual property, gaining a competitive edge in the market while eliminating a potential rival.
Related Terms
Different from a merger of equals, where both companies are of similar size and strength, a deep pocket merger involves a dominant player acquiring a weaker entity.
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