it satisfies all three diversity tests $($industry attractiveness test, cost$-$of$-$entry test, better$-$off test$)$ to grow shareholder value over the long term.

due diligence and integration can be done easily and at low cost.

it is not time$-$consuming and allows the firm to realize great profits in the end. it is quicker than trying to launch a brand$-$new operation, offers an effective way to hurdle entry barriers, and allows the acquirer to move directly to the task of building a strong position in the target industry.

it is less expensive, less risky, and more effective than launching a new startup operation.