Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Creating an economy of scale can prove difficult, and the new, larger entity can be unwieldy. Again, using stock to finance the deal can be its downfall "a booming stock market encourages mergers...Deals done with highly rated stock as currency are easy and cheap, but the strategic thinking behind them may be easy and cheap too." ("Mergers and Acquisitions: Why They Can Fail," 2006, Investopedia)
Financial risks of merging with or acquiring an organization in another country and how those risks could be mitigated
Globalization," defined as "the arrival of new technological developments or a fast-changing economic landscape that makes the outlook uncertain are all factors that can create a strong incentive for defensive mergers. Sometimes the management team feels they have no choice and must acquire a rival before being acquired. The idea is that only big players will survive a more competitive world." ("Mergers and Acquisitions: Why They Can Fail," 2006, Investopedia) Also, the general trend towards globalization offers an additional incentive to seek to merge with a company with a developed market in an international outpost that the other company wishes to make inroads into -- but there is no guarantee that the corporate culture created by the merger will be equally as successful, or have an equal thumb on the local pulse as the smaller, original company.
Furthermore, local governments can be difficulty to deal with, financing the larger company may be difficult, and a global company is more subject to the uncertainty of worldwide political events. A devalued currency because of fears of internal...
"Merging companies can focus on integration and cost-cutting so much that they neglect day-to-day business, thereby prompting nervous customers to flee. This loss of revenue momentum is one reason so many mergers fail to create value for shareholders." ("Mergers and Acquisitions: Why They Can Fail," 2006, Investopedia) Focus on the long-term, not on the short-term is the surest prescription to weathering the financial difficulties that may accompany a merger or acquisition. Building a stable, new, corporate culture that combines the two nations, and showing sensitivity and tolerance towards the different management and social approaches to doing business is also important.
Works Cited
Mergers and Acquisitions: Definition." 2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers1.asp
Mergers and Acquisitions: Valuation Maters." (2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers2.asp
Mergers and Acquisitions: Why They Can Fail." (2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers5.asp
Works Cited
Mergers and Acquisitions: Definition." 2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers1.asp
Mergers and Acquisitions: Valuation Maters." (2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers2.asp
Mergers and Acquisitions: Why They Can Fail." (2006). Investopedia. Retrieved 5 Dec 2006 at http://www.investopedia.com/university/mergers/mergers5.asp
Mergers and Acquisition Company Acquisition As a CEO, you are trying to acquire a foreign firm. The size of your firm will double and it will become the largest in your industry. What does your firm do and what does the foreign firm you are trying to acquire do? Where are the firms based? look company is a major company in Ohio Columbus in the U.S. And specializes is the sale of all
Leading Mergers and Acquisitions of Hospitals Merging and Acquisition When the size of an organization continuously increases in size, management problems arise. Such large organizations operate through bureaucratic structures. The main factors that make bureaucracy work are standardization, co-ordination and specialization. Bureaucratic structure is very efficient in achieving economies of scale and avoiding duplications. The bureaucratic structure works best when there are clear rules of coordination and a clear chain of command
Managing All Stakeholders in the Context of a Merger Process Review of the Relevant Literature Types of Mergers Identifying All Stakeholders in a Given Business Strategic Market Factors Driving Merger Activity Selection Process for Merger Candidates Summary, Conclusion, and Recommendations The Challenge of Managing All Stakeholders in the Context of a Merger Process Mergers and acquisitions became central features of organizational life in the last part of the 20th century, particularly as organizations seek to establish and
III.1. Value innovation and Blue Ocean Strategy The Blue Ocean Strategy was developed by Kim and Mauborgne (2005) and it's the result of long-term strategy study over 30 industries covering 120 years. The core idea of this theory is to create value for the firm and its buyers by taking the differentiation-cost trade-off to a different level. Successful firms may want to create "blue oceans," which represent the new/innovative solution in
Finance-dominated proponents also maintain that boom economic periods generate a more varied divergence of valuations that fuel merger activity (Medlen 2007). In this regard, Medlen concludes that, "Taken collectively, these understandings may explain some of the merger activity in booms, but they involve certain asymmetries that undercut their explanatory power. High stock valuations allow stock to be utilized as currency and collateral for takeovers; yet stock booms also make
Oil Industry For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. The oil and gas industry is extremely important in how the world operates and sustains its living. The ability to capture the nature resources provided