Cross-Border Mergers and Acquisitions

Cross-borders mergers and acquisitions

Cross-borders mergers and acquisitions

Introduction

In the global panorama of corporate finance, merger and acquisitions is an extremely viable phenomenon. The concept of business shut down has been dead and firms now look forward to corporate restructuring encompassing of large firms taking small firms over for good money. The process pertains to merger and acquisitions. In the context of corporate finance today, Merger and Acquisitions pertain to a very important flux of the overall dynamics of the way corporations and global business players manage. Moreover, large stock exchanges arrange mergers and acquisition between small and large business organizations to make them one-single entity upon the terms and conditions that are implied in the contract.

Merger and Acquisitions are defined as “a strategic settlement where two or more business organizations willingly handover the ownership to one large business organization for the purpose of corporate restructuring, as well as, revival of the smaller organizations”. Moreover, mergers and acquisitions is one of the most significant facets of the global corporate world for today. It is defined as “an aspect of corporate strategy, finance and management that deals into buying, selling, division and combination of business organization to earn sound financial standing in the corporate environment”. They take place once the business that is merging or acquiring, us been valued through several valuation techniques (Burner, 2011, 203-254).

The term merger and acquisition are two different terms, in terms of, their context to business, as well as, law. Merger pertains to the combination of two firms becoming one with their existing markets and business prospects with a share in financial and strategic gain and loss. Similarly, acquisitions pertain to the act of an enormously larger corporation to acquire the entire stake of a smaller organization to make it a properly functioning unit in their business. However, in both the cases, the former corporate structure ceases to exist and the companies have to alter and reshape everything including their names.

Merger is more detailed process than acquisition, acquisition makes the purchased unit included in the company, and therefore, the restructuring is not generally required. However, in case of merger; both the companies come together and formulate a strategic alliance encompassing of the restructuring of all the core business functions, objectives and values (Medenhall & Stahl, 2005, pp. 67-89).

The paper discussed the concept of 'Cross-Border' merger and acquisitions. It assesses the issues with mergers and acquisitions, as well as, the recent mergers and acquisitions across the globe. The paper focuses cross-border mergers and acquisitions in detail and assesses different functions pertaining to it. The paper further analyses the merger of British Airways with Iberia and demonstrates a critical evaluation in that matter. The paper pertains to study valuation in mergers and acquisitions, value-addition in mergers and acquisitions, corporate re-focusing, strategic alliance formulation and the perspectives and hindrances by the state and government for mergers and acquisitions.

Discussion

The concept of mergers and acquisitions

As discussed in the introduction, mergers and acquisitions are one ...