Managing International Acquisitions
Managing International Acquisitions
Mergers and acquisitions are attempts from companies to combine their strengths in order to achieve synergistic benefits. The reasons behind a merger or acquisition may be various, e.g. increasing market share, entering new markets, developing new products through R&D, or achieving administrative benefits.
In a merger, two companies combine to form a new company. In an acquisition, one company takes over the other in terms of management or ownership. Mergers and acquisitions can create economies of scale, reducing costs of similar functions. Cost per unit of output can also reduce, with increased output bringing down the cost per unit produced. Investors are happy with the notion that the merger or acquisition will give the company added strength and benefits. In contrast, when a merger or acquisition does not work, management can choose to de-merge or dis-invest ownership in acquired companies, spinning them off to retain its......
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