Running head: MERGERS, ACQUISITION AND INTERNATIONAL STRATEGIESMergers, Acquisition and International StrategiesNameInstitution1MERGERS, ACQUISITION AND INTERNATIONAL STRATEGIES2Mergers, Acquisition and International StrategiesChipotle and McDonaldsMcDonald's Corporation is one of the world's largest fast food chain restaurants. It servesapproximately 68 million customers in over 119 countries daily through 35,000 outlets. It facescompetition in the fast food industries from companies like Starbucks, Subways, Burger Kingand Chipotle, who are also huge players in the fast food industry in America as well asinternationally. In 1998, McDonalds implemented a horizontal integration strategy by acquiringone of its competitors, Chipotle. Horizontal integration strategy is where a company decides toacquire a firm in direct competition. The main aim of this strategy is growth, increasedprofitability, and gaining more market share. The strategy was McDonalds new way of growingby penetrating a new market niche, Mexican food, which was the specialty of Chipotle. Theyinvested $360 Million for a 90% stake in Chipotle.The merger was indeed a wise choice for McDonalds as well as Chipotle. ChipotleMexican Grill at the time of the merger had only 14 restaurants, and although its revenues wererising it did not have sufficient capital to grow exponentially. The main reason Chipotle had foragreeing to the acquisition was the due growth strategy, which they ...
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