Merger and Acquisition: Strategies and Best Practices

This assignment report provides an overview of merger and acquisition (M&A) activities, including its importance in business, key aspects to consider, and best practices for success. The report highlights the benefits of M&A, such as achieving economies of scale and financial synergy, harmonizing between companies, and providing a competitive edge. It also discusses the importance of proper evaluation of transactions, accounting and funding, cultural differences, regulations, and strategies in M&A activities. The report concludes by emphasizing the significance of M&A in recognizing business at an international platform.

INTERNATIONAL MANAGEMENT
feedback
HI THERE
Can you please look carefully project question and requirement.
Still lots need to be change. Can you please see below feedback.
 Can you please let me know which sector you talking about?
OR Which sector you has been chosen. ? if you want you can
choose specific sector like , pharmaceutical or technological.
 Introduction: executive summary about 4 countries one sector.
 Merger and acquisition definition and activity description,
successful. Trand explain recent development in 4 countries.
Bar chart and on the bar chat you should make compare &
contrast on the same sector among the four countries. Which
activity is the best?
 You need to mprarthana.bake picture together within one bar
graph or you need to make 4 bar graph to discuss, to make
compare. At the same times you have to mention about
number, if you have percentage, and trend of the graph.
 In the graph you should mention 4 country trend and
description. Description should be more.
 4 countries difference with bar graph


 Need description among the 4 country
 Menger activity
 Recent develop among the country
 Bar chat.
 Accounting difference
 Taxation
 Culture
 Regulation
 Strategy
 Conclusion
 References.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
Merger and acquisition...........................................................................................................1
International harmonisation in merger and acquisition..........................................................4
Organisation structure and employees....................................................................................6
Taxation..................................................................................................................................7
Accounting and funding.........................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................8

EXECUTIVE SUMMARY
International financial management is the main tool which are used for enhancing firm's
growth and development. Merger and Acquisitions are the major tool that are used for making
business sustainable and able to get the competitive advantage over the other rivals. M&A
activity is the evolution of the most industrialist nations that are now being used by the major
nations such as, UK, USA, Japan and Germany (Phillips and Zhdanov, 2013). They help the
business to manage globally in order to have economies of scale, financial synergy and so on. To
enter in any of the country, merger and acquisition is the most perfect tool. Service sector plays
most important role for boosting the economy in a great extent.
Merger and acquisition
Merger and Acquisitions are the most imperative tool that are being used in order to get
economies of scale. This is usually the domain of corporate finances, administration and strategy
dealing with buying and/or linking with other organisations. Under the merger, two firms
connects their entire forces to become a new and advance business with the new name.
In a simple term, when two or more firms connect to each other in order to have the
better operational activities. It might have the new firm or one of the existing firm after merger.
This activity assists the firm to expand their business operation globally. With the help of it, the
company would need to make their business prosperous. These are the activities that are used in
order to develop the nations' GDP. Countries like- UK and USA evolve the concept of M&A.
This has been observed that firms are able to frame their business operations so effective and
efficient by using merger and acquisitions. However, there are two kinds of mergers and
acquisitions, namely: cogeneric merger and conglomerate merger. These have been defined in
details:
Cogneric merger: This kind of merger is occurred with the similar industry. Two or
more firms for the same sectors are merged in order to get the synergy in operations. This is the
technique that are used in order to produce more products without spending extra money and
also able to reduce the cost of the product (Gugler and et. al., 2011). Financial synergy,
economies of scale and others are the major benefits that could arise due to it. Advance countries
like- UK, USA, Japan and Germany have this concept in a great extent. They use this concept so
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that they could help out to make the business in an effective manner. Two firms have more value
than two separate firms.
Conglomerate merger: This is the other concept which are used in order to diversify the
business in various sectors. This kind of merger happen when two or more companies merge
with one of them or make any new entity, but they should not related to the same sector. This is
the technique used when any firm is trying to expand their operation in many areas. This will
able to make the business run in different different sectors. This has been observed that factors
attributing to M&A drawbacks are not usually luck by chance. But instead by unsuccessful to
allocate close attention to various essential requirements under whole aspects of merging and
integrating two firm structures.
In UK, USA, Germany and Japan, most of the entrepreneurs do not grab and high future
growth. Therefore, framing firms for short run, expecting to sell the firm for big profits. These
countries are developed just because of the successful implementation of the mergers and
acquisition within these nations (Ferris, Jayaraman and Sabherwal, 2013). However, success or
failure can be defined due to various factors. Success might be defined by way of short term
performance,like- enhancement in the turnover after merger activity. These success factor can be
measured by way of measuring success or failure of the company.
Short term measures of success: There are various well documented short haul effects
of a merger announcement. In many of the cases, at the time of announcement of merger is made
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then the value of the target company would goes up. On the other hand, the value of the
acquiring company would remain constant or fall. Under few cases, due to pre- announcement
rumours, target company's shares will goes up. This kind of perception for the target company's
share price to increase, has most imperative application for the short term financial success of
acquisition.
Long term measures of success: The long term view tends to be more complex and less
clearly defined. This kind of performance could be defined on a wide variety of variables. This is
based on two key areas: payment methods and implementation.
The merger is a normally financed either by a cash deal, or by a share deal, or a merging
of both. Under a cash deal, existing shareholders would ready to sell their shares in a cash. Under
share deal, existing shareholders get new shares on behalf of their existing ones. In few cases, the
deal might implement a merging of both (Cooper and Finkelstein, 2014).
Now, the national corporate governance frameworks is changed henceforth, M&A
activities enhanced comprehensively. Under various countries, the relation between banks and
firms and cross shareholding of tasks is totally disintegrated and certain valid changes have also
been appreciated M&A. Although, emerging so many hostile takeover activities occurred in
Germany and Japan.
Comparison among various countries
USA GERMANY UK JAPAN
It has been found that
economic of scale is
being achieved only
through getting proper
advantages from M&A
in USA. It is the most
important goal is to
provide perfect
competition in a
market.
In this country outside
companies are
welcome due to
various factors that are
effective because of
M&A. In has been
found that in Germany
a sound economic
system is being
developed because of
skilled workforce that
would help to attract
Because of M&A most
of the company is used
it as important tool in
order to attain synergy
from the organisation.
Economic of scale is
being achieved
through effective
merger and
acquisition.
In relation to expand
their business
operation on more than
one country or to
increase its market
share are helpful
through horizontal
merger. In relation to
overcome extra cost in
production most of the
countries are mergered
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more outside
companies.
together.
From the given bar chart, it has been seen that in 2001, M&A activities are around $900
billion dollors which was increasing in the next succeeding yaer and this was reach to $2400
billion dollors in 2015. hence proved, M&A activities are increasing at a devestating rate in US.
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This figure reflects the M&A activities occured in UK during 2005 to 2016. which were so less
in 2005 and increased in 2007 which was the peak time when most of the M&A activities
occoured.
Japan M&A activities from last 1996 to 2015 have been emerged. In the year of 1999, most of
the M&A activities are made. But most of them were domestic. In 2015, the outbound mergers
were increased.
Various M&A activities are done in Germany. Which is growing over the time. This also reflects
various M&A deals which happen in the country.
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International harmonisation in merger and acquisition
This is the moral way of operational in setting to the organisation. Harmonisation is an
ethical tool for running the firm effectively. The international stagnation is development does
not look like to have an bad effects on the expansion plans. Due to the M&A activities, the
contracting companies are able to expand their business operations in other countries so that they
could lead to make their product cheaper and make them available at global platform. This also
has been seen that the management of the contracting companies able to make their operation in
an effective manner so that they could attain their objectives and contributes to the society as
well. With the help of M&A, companies are able to know about other country's cultures, their
traditions and other things so that they could able to know each other and target company's
employee becomes the employees of the acquiring company. Amalgamation of two firms sound
so easy but this is not an easy task. In practice, there are various boundaries for making the
mergers and Acquisitions which faces achievable value added, economies of scale and chances
to extent the firm's firm's presence internationally. Apart from these hurdles, culture is one the
most imperative hurdle to sound integration. That is why, almost 30% M&A deals does not
perform well. Diversity in the culture in the companies generates hurdles for making difficult but
that does not mean impossible (Changqi and Ningling, 2010). But, due to globalisation and
emerging of the developing nations , various mergers and acquisitions now becomes cross-
border that use to deliver high attention to the national cultures. Additionally, the
internationalization of business in the few past decades forced the firm to be more competitive at
global stage. Although, customers became international , firms are required to follow such trend
and frame their recognition at world level, and also treating to the pressures of increasing
economies of scale in a fast unify international economy. Various components like- privatization,
corporate restructuring and deregulation made cross-border merger possible.
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From the above mentioned graph, this has been seen that the 2-5% of entire rate by the
100 days which almost rise to 65% within 12 months, in the next 12 months, the company
would able to get 90-97% synergies and in the next year the company would able to get 100%
synergies in their operations. These are the major context that are totally used in order to have
the better synergy.
In this era, firms are now cooperative in a fast manner. Executives now follow mergers,
joint venture and acquisitions in order to create value by taking technologies, goods, penetrating
markets, attaining economies of scale, and framing international brand image. Although, value
is hardly framed via M&A. Henceforth, various factors have emerged in order to justify the
unachieved objectives of a big merger in terms of capital. The main divergence in firms and
firms cultures, both are influenced by their prestigious national cultures. Culture is assumed to be
the most complicated factor to control (Calvani and Alderman, 2010). Harmonisation assist to
overcome these issues so that they are able to attain the objectives. The firm which going
international at an international level express meeting and working with various culture. Infect,
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manages of controlling, working and norms, beliefs and values are separate throughout the plant.
Face those cultural differences of firm leaders, and unluckily only the ones which have been
facing cultural difficulties in the past understand the requirement to invest time and money in
cultural integration and modification of management.
Henceforth, culture is a most troublesome concept as multifaceted, tricky and
complicated to measure. Apart from this, there are so many definitions available for this term
based on the context, and the point of view studied. As an outcome, many acquiring firms have
not yet framed a structured process to analyse, control and integrate firm cultures, as around 75%
executives assume culture as a most important factor in making value via Merger and
acquisition.
Organisation structure and employees
As per using this mode of entry into international market merger and acquisition is said to
be most important aspect for any company. It is done before meeting all those organisation
structure requirement and to make changes as this will be necessary to expand the businesses in
coming time. Hence, it will be helpful to design a complete frameworks of an organisation and
individual those are working as part of team in achieving the goal of an organisations.
Taxation
In merger and acquisition the company is need to identified there losses to be adjusted in
coming time. So company make amalgamation to set off the losses of the company and to protect
them from heavy losses in coming time.
Accounting and funding
Proper evaluation of transaction perform by the company would be evaluated in order to
identified the assets and outstanding liabilities those are beard by the company. Funding should
not be made under this situation as all the settlement is done through share of amalgamate
company.
Culture
Under M&A activities, different culture is emerged which are required to be opted. This
reflects the most activities.
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Regulation
Certain norms and regulations are required to be followed while exercising M&A
activities.
Strategies
M&A activities are the best mode for entering in any country. This reflects the main tool
for developing the country in a better manner. Henceforth, this reflects the major strategy which
covered under this.
CONCLUSION
From the above mentioned report, it has been observed that the merger and acquisition
becomes the most important tool for recognising the business at an international platform. This
also emphasised that M&A provides target and acquiring companies to produce product in a
cheaper way, render economies of scale and financial synergy. Harmonisation between both
companies are provided.
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REFERENCES
Books and journals
Calvani, T and Alderman, K., 2010. BRIC in the international merger review edifice. Cornell
Int'l LJ. 43. p.73.
Changqi, W and Ningling, X., 2010. Determinants of cross-border merger & acquisition
performance of Chinese enterprises. Procedia-Social and Behavioral Sciences. 2(5). pp.6896-
6905.
Cooper, C.L and Finkelstein, S. eds., 2014. Advances in mergers and acquisitions. Emerald
Group Publishing.
Ferris, S.P., Jayaraman, N and Sabherwal, S., 2013. CEO overconfidence and international
merger and acquisition activity. Journal of Financial and Quantitative Analysis. 48(01). pp.137-
164.
Gugler, K., Mueller, D.C and Weichselbaumer, M., 2012. The determinants of merger waves: An
international perspective. International Journal of Industrial Organization. 30(1). pp.1-15.
Phillips, G.M and Zhdanov, A., 2013. R&D and the Incentives from Merger and Acquisition
Activity. Review of Financial Studies. 26(1). pp.34-78.
Online
UK cross-border M&A activity, 2017. [Online]. Available through:<http://www.minerva-trust.com/news/cross-
border-m-a-activity/>. [Accessed on 21st August 2017].
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