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. The advent of globalisation has seen a significant rise in cross border mergers and acquisitions where the large multinational corporations seek to gain a strategic position and competitive advantage in the global market (Zhao 2008). However, this state of affairs can be advantageous to the multinational corporations as they will be able to attain their goal of making profits but it will pose challenges of supervision of these mergers and acquisitions by the host government (Zhao 2008). From this assertion, it can be noted that regulation is somehow important so as to prevent monopolies whereby the dominant multinational corporations can end up reaping huge profits at the expense of the welfare of the general citizens of the host country. Thus, regulation can be defined as “action formed and carried out by government, and it is the normal rule or special action that directly interferes with market allocation mechanism and indirectly change the decision-making of the enterprise and consumer,” (Spulber N.D. as cited in Zhao 2008). As going to be explained below, it is important for the host country to regulate as well as supervise the activities of the investors. Regulation is important as it serves as a measure to prevent the emergence of low efficient competition especially in horizontal mergers (Zhao 2008). In some instances, multinational corporations can merge with the powerful competition in the host country with the aim of controlling the market of the host country. This is not advocated as it destroys competition in the host country whereby the multinational corporations can end up reaping huge monopoly profits at the expense of the citizens of the host country. Competition will become inefficient and this will be against the intention of the host country to promote growth of the economy through equitable means. The main purpose of granting permission to mergers and acquisitions to operate in host countries is to stimulate economic growth, the reason why it is important f
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…
ferences 14 Cultural Integration in Cross-border Mergers and Integration: Issues and Solutions The importance of M&A cross-border cultural integration A merger or acquisition is often candidly described as a marriage of two organizations; in business, this would be between two enterprises.
6 4. Financing – How Is The Acquisition To Be Financed? 7 5. Defence Tactics – Were the Tactics Employed Sensible Ones? Were the Managers of the Target Company Genuinely Resisting or Simply Seeking to Squeeze Out a Higher Offer? 8 6. Implementation – Will the Acquired Company be Difficult to Integrate?
Mergers and acquisitions Name Institution Date of submission ABSTRACT Mergers and acquisitions occur in business companies all over the world. In mergers, two different companies come together to form a single company known as a parent company. In acquisitions, one big company acquires a smaller company so that the two companies transact business under a single owned company.
A number of researchers discussed about the synergies that 'M & As' accord to the combined entities and how organisations factor in the benefits of synergies into their strategies to achieve not only growth but increased competitiveness, market share, profitability and shareholder value.
The significance of this study is twofold. First, the advantages of the merger and acquisition activity in China will be identified, as there has been a growing trend in the prevalence of mergers and acquisitions all over the world, especially in developing economies like China (Finkelstein 1999).
He has provided vital assistance along all the way. His help is really immeasurable.
Department of Finance, XYZ University, is another resource to gaining this study. It has provided valuable modulation, books, Journals, Researches and too many efforts for this study.
Therefore it will be very important to understand how this trend impacts on the Chinese economy, as the country is effectively competing with other countries for FDI. Secondly, this study is significant as it points out the causes of the failures of the merger and acquisition activity in China.
he governments on the other hand, do not like too much buyout and mergers because this trend leads towards making the economy more monopolistic in nature and therefore, few players will have an undue competitive advantage on others. The framework used to prosecute the companies
HRM is the custodian of talents. It is often being noticed that for the sake of productivity and business efficiency two similar kinds of companies are merged. They become one single entity after the merger. But there are certain cultural differences
In a merger, two companies negotiate on terms of operation and share capital thus they end up dissolving the existing companies and form a new company. An acquisition is the process by which a large or powerful
3 pages (750 words)Coursework
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