Mergers and Acquisitions Essay Example | Topics and Well Written Essays - 3000 words

Mergers and Acquisitions - Essay ExampleThe barriers in establishing business units in overseas countries were diluted as a result of globalization. Moreover, it is possible for larger firms to select their deliver strategies or mode of entry like merger, acquisition, or joint venture to enter in to the overseas market. Competition is becoming tough in all(prenominal) area of business and it is difficult for even big organizations to survive in the market if they fail to implement suitable business strategies to counter the competition. It is now low-cal for organizations to do business in any country they want because of globalization. Outsourcing and offshoring are some of the major business strategies adopted by organizations in order to exercise the overseas market. On the other hand, some organizations use merger and acquisition (M & A) based business strategies to spread their wings in to overseas countries. Gaughan (2007) explained M & A as a process in which two corporati ons combined together to form a single one. Moreover, only one corporation survives after the M & A while the merged corporation goes out of existence after the merger process (Gaughan, 2007, p.12). Domestic mergers and acquisitions were popular prior to globalization however, torment delimitation mergers were not accepted. ... This means cross border mergers have become a reality nowadays. The following chart provides an idea of the size of global merger deals mingled with 2005 and 2007. (Mergers and acquisitions, 2008) Cross border mergers and acquisitions (M&As) are a main vehicle for foreign direct Investment. Yet despite its quantitative importance, the determinants of cross-border M&As are static not well-understood (Brakman et al, 2008, p.1). The benefits of cross border alliances or mergers are not limited to the companies alone. Cross border mergers and acquisitions may add more value to the companies and its stakeholders. This paper analyses the cross border merger and acquisition process and the sources of value added to the stakeholders as a result of this business strategy. Since the theories and principles with respect to cross border mergers are extensive, this paper entrust not discuss anything about negotiation, finance, alternatives etc. Cross border merger and acquisition Leading financial consultancy Thomson Financial has said that 2006 was a mega-merger year for India 1,164 deals set at a total of $35.6 billion as against 1,011 deals worth $21.6 billion in 2005. After the Tata-Corus and Vodafone-Hutch mega-deals, conservative estimates by Indian analysts have pegged mergers and acquisitions (M&As), including outbound and incoming deals involving Indian firms, to reach $100 billion in 2007 (Shankar & Reddy, n. d, p.457) Companies from emerging economies like Brazil, India, Russia and China are currently engaged in acquiring some of the around prestigious companies in America, Europe and Africa (see appendix for some of the statisti cs of FDI inflows to the host countries as a result of cross border M& A). Recently Indias railroad car manufacturer TATA acquired