An FTC panel report (based on a focus group with 10 executives) once counted 31 motives for merging with or buying another company, ranging from expanding product lines to increasing managerial strength. At the other extreme, legendary investor Warren Buffett has philosophized that there is only one reason for M&A activity: to move investment out of cash and into assets. For many companies, there are usually a variety of motives. Scholars generally agree on the following common reasons why companies make acquisitions:

• Bargain hunting: Take advantage of a price that is low in comparison to past prices and/or estimated future prices of stock or assets, or in relation to the cost the buyer would incur if it built the company from scratch (undervaluation)
• Control: Assert control at the board of directors level in an underperforming company with dispersed ownership (agency problems)
• Cost savings. To reduce the cost of operations of the acquiring and/or target company by combining both companies’ operations and eliminating redundancies. This can also include lowering the cost of capital by smoothing cash flow and increasing debt capacity (financial synergy)
• Diversification. To hedge against risk in current industries by investing in others
• Financial offset. To smooth financial performance by combining companies with different cash flow cycles, tax profiles, and/or debt capacities
• Growth and scale. To lessen economic vulnerability and/or increase latitude for strategic choices  and major investments (e.g., technology) by increasing the size of the company and thus potential revenues and/or profits.
• Horizontal synergy. To increase market share or reduce competition by buying an actual or potential competitor.
• Management efficiency. To realize a return on investment by buying a company with less-efficient managers and making them more efficient or replacing them.
• Market share. Increase market share by gaining more customers and reducing or eliminating power of a competitor (market power)
• Strategic progress: To accomplish strategic goals faster and more successfully by buying an operating company that is already doing what is envisioned in the buyer’s strategy, or that could provide some missing piece of the buyer’s strategic puzzle. (strategic planning).
• Talent or treasure acquisition. To obtain specialized talent or  unusual assets that might be otherwise difficult to obtain. 
• Value via new resource/capability combinations. Combine specific resources and/or capabilities to create new value, often in a unique, unprecedented way.
• Vertical synergy. To achieve price efficiencies or other economic benefits by buying a supplier or customer.