Which of the following is NOT a typical motivation for mergers and acquisitions?

The motivation for mergers and acquisitions typically revolves around enhancing business efficiency, expanding market reach, and leveraging resources for greater competitiveness. Market consolidation refers to the process of combining companies to reduce competition and increase market power, which is a common reason for pursuing M&A activities. Similarly, gaining tax advantages can be a significant incentive, as certain mergers can lead to tax optimizations beneficial for the acquired company or the parent company. Furthermore, access to new technology represents a strategic motivation for firms looking to innovate and improve their products or services by incorporating cutting-edge technologies from another firm.

In contrast, a reduction in product diversity is generally not considered a motivation for mergers and acquisitions. Instead, companies often seek to increase product diversity through M&A to cater to varied consumer preferences, mitigate risks associated with relying heavily on a limited product range, and enhance their market propositions. Therefore, focusing on reducing product diversity does not align with the strategic purposes that businesses typically pursue in mergers and acquisitions.