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Finance & Accounting
Pages 10 (2510 words)
How does government regulation affect the success or failure of mergers and acquisitions? There are many factors that determine the success or failure of mergers and acquisitions hence, it is important for everyone involved in this process to have a clear understanding of how it works.
Case examples about the impacts of government regulation of mergers and acquisitions will be drawn from USA, Europe and China. The paper is specifically concerned with analysing current issues pertaining to government regulation of mergers and acquisitions in China in comparison to the other developed countries. According to Jackson & Schuler (2000), in a merger, the two firms are supposedly on equal footing after they have been merged where one new company will continue to exist while in an acquisition, it is clear that one firm will take control of the other’s resources. There are various reasons why firms embark on mergers and acquisitions and these include the following: the need to increase their market share, increase their geographic reach as well as responding to new deregulation. In most cases, one major objective of a merger or acquisition is to gain skills and talents of people employed by another company. Therefore, it would be imperative for both parties involved to have a sound understanding of the concept of mergers and acquisitions and no one company should yield more power over another since this would imply easy takeover of another company’s assets and resources. A good deal should be in actual fact beneficial to both parties involved. However, of concern is that these businesses do not operate in a vacuum but in different environments that are characterised by different policies. ...
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