What are the major factors that drive mergers and acquisitions?

Diversification: One aspect that encourages mergers to develop in new ways by broadening the selection of goods and services available is diversification. Such a merger benefits both parties involved by opening up new markets and expanding their revenue-generating prospects;

Asset Acquisition: The need to acquire new technology or other assets that would be otherwise impossible to obtain or that would take a very long time to obtain, is another typical reason that drives mergers

Value creation: Another common reason for mergers is value creation, which is the chance to establish a new company whose worth exceeds the combined value of the two parties to the merger. A merger can also be driven by the need to increase financial capability by making the newly established company eligible for more substantial credit facilities. 

Increasing financial potential - a merger may also be driven by the need to boost financial capacity by granting the newly formed business access to larger loans.