Question

Which of the following statements is correct? Review Later Strategic buyers are asset managers that are trying to time the purchase or sale of a business. Strategic buyers are institutions that provide capital and are not operators. Financial buyers are institutions that provide capital and are not operators. Financial buyers are operating partners that try to create synergies.

Answer 1

Answer:

Strategic buyers are asset managers that are trying to time the purchase or sale of a business.

Financial buyers are institutions that provide capital and are not operators.

Explanation:

Strategic buyers are the buyers which aim to buy the company through acquisition, or M&A in order to gain more power in the industry, basically expanding their horizons, they are competitors, or the suppliers in the supply chain, or the customers of the product, they tend to buy such companies in order to decrease their share of cost.

Financial buyers are the one which basically provides finance to the company.

In simple terms these buyers just invest in the companies and have short term or long term goals from this investment, as long as these goals in the form of expected return are fulfilled they keep the investment, as soon when they discover its profitable to sell it further and have a capital gain they do so.