Mergers and Acquisitions for Example Hon Hai - Case Study Example

With the successful implementation of the merger scheme, the amalgamated entity is likely to derive the synergies of the merger and derive cost and other advantages resulting from the merger of the undertakings. The paper also deals with the resultant economies and advantages accruing out of the merger by studying the case of the acquisition of another company by Hon Hai (Faxcom).

Chapter 1 Introduction
While ‘business strategy’ represents the goal of the company to attain sustainable competitive advantage in one of the businesses of the company, ‘corporate strategy’ represents the objective of the company to manage multi-business activities to create a corporate-wide advantage that will benefit each of the business the company owns and operates. The corporate strategy looks into the opportunities available to the company both internally and externally to enhance its competitive strengths and sustain its sales growth and profitability. A strategic analysis of any company thus includes assessing the strengths and weaknesses of the company based on the internal environment as well as threats and opportunities that the company is subjected to because of its relative positioning in the market and the industry. The main objective of any strategic analysis is to identify the ways in which the existing resources can be shared between the multiple business activities and identifying new resources, which will enhance the competitive strengths of the company. This may include the opportunities for mergers and acquisitions, which will provide the combined synergies and scale economies to the company for enhancing its competitive edge.

Corporate mergers and acquisitions (M&A) have long received considerable attention from the corporate world, the investing public as well as academicians and scholars. According to Thompson Financial Reports for the year 2005, the worldwide M&A deals were estimated at the US $ 2.7 Trillion which has posted an increase of 38.4 percent from the total volume of US $ 2 Trillion for the year 2004.