[Effectiveness of mergers and acquisitions as the business ownership strategy for Hong Kong firms]

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Acknowledgement

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DECLARATION

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Abstract

Almost all main European energy companies have recently shown an unprecedented activism on financial markets and wave of M&A's seems far from being over. A sound understanding of wave can provide hints on future developments of market and effects on merger policy. These operations are explained by several reasons, ranging from pan-European players' strategy to creation of national champions, from objective to merge gas and electricity businesses (convergence mergers) to aim of re-building vertical dimension of industry after liberalization. In face of such broad range of motivations, merger policy has to be applied consistently to each case and case-law is developing to better address energy-specific issues. Still, characteristics of energy industry may allow for more economic insight and longer-term perspective in merger cases, in order to guarantee that energy and merger policy are leading to same objectives, through different tools. As result of merger and acquisition, Hong Kong has become an open and attractive market for foreign investors. The mergers and acquisition in Hong Kong are on increase and have been effective with many companies undergoing restructuring in order to achieve customers worldwide.

Table of Contents

INTRODUCTION6

PREVIOUS STUDY RESEARCH7

RATIONALE FOR MERGERS AND ACQUISITIONS IN HONG KONG9

REASONS FOR FAILURE OF AMALGAMATIONS AND ACQUISITIONS10

Research Question12

PROPOSED METHODS14

Primary and Quantitative Research14

Research Instruments (only for Primary Research)15

Questionnaire (only for Primary Research)15

Sample Size (only for Primary Research)16

REFLECTIONS16

ETHICAL CONSIDERATIONS17

REFERENCES19

Introduction

Organisations have perfect 'habitat' where they will flourish and environments in which they will fail. Business type, potential customers and resources will limit choice of suitable location. Success lies in identifying which location falls under which category. "selecting right position can be one of most significant business conclusions that you will make”. Hall stresses location importance when searching for creativity and innovation. He describes creativity as 'knock on effect', causing innovation to spread, similar to Silicon Valley. (Harrison et al 1999:173)

Cross-border M&A refers to corporate action of purchasing shares or assets of another company in foreign country. Obviously, cross border M&A is transaction of control rights between companies in two or more countries. (Loderer and Martin 1992 69) Although goals of cross-border M&A are often said to be creating value for shareholders of acquiring companies, results are far apart from stated objective. Systematic studies show considerable number of cross-border mergers and acquisitions end up in failure. In addition to differences in market environments between home and host countries, competitive and comparative advantages of acquiring companies are considered more important. Those benefits encompass corporate governance, peak administration term ...