International Financial Management: Germany-Japan & UK-USA M&A Success

This report delves into the realm of International Financial Management (IFM), focusing on the mergers and acquisitions (M&A) activities between Germany-Japan and the UK-USA. It begins by defining IFM and highlighting its distinction from domestic financial management due to factors like currency variations, political landscapes, and market imperfections. The report examines the success of M&A in the specified regions, emphasizing Germany's economic strength and its trade relationship with Japan, as well as the investment-friendly climate in Germany that attracts Japanese firms. It also provides data on successful M&A involving UK companies, noting the highest levels of activity in recent years. Furthermore, the report explores the possibilities of international harmonization in the M&A field, discussing benefits such as increased human resources, post-acquisition advantages, integration strategies, and effective communication. The report concludes by summarizing the key aspects of IFM and the trade relations between Germany and Japan, along with the advantages of their business environment.

INTERNATIONAL
FINANCIAL
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
a) The success of mergers and acquisitions of Germany-Japan & UK-USA.............................3
2) Possibilities of international harmonisation occurring in the merger and acquisition field. . .4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The meaning International Financial Management can be defined by the term itself. The
management of financial resources in a business environment at an international ground is
known as international financial management. They are absolutely different from the normal
business environments as there are variety of currencies of different countries, political situations
with dissimilarities, markets which are not perfect and a diverse sets of opportunities.
Globalization is what opened the doors of many countries for each other to come up with
international financial management. The vaster progression in the sector of telecommunication
and technologies of transportation had a great increase in accessibility causing regular drop in
prices due to liberalization (Madura, 2011). This project will be dealing with the international
financial management of some of the major mergers and acquisitions in the global economy: UK
& USA, and Germany-Japan.
a) The success of mergers and acquisitions of Germany-Japan & UK-USA
Germany is the largest economy in Europe and the largest European trade partner is no
country other than Japan. The European continent's largest market is the German market. The
advantage of being in such an amazing geographic position has owed the country to be free from
trade obstacles from the side of European Union and Germany has been excellently emerging as
a place for the Japanese to expand their business in Eastern Europe (Bekaert and Hodrick,
2009). A legal system with high reliability and potentially stable along with the presence of an
efficient administration provides the trader there with high degree of security for their
investments. German companies are worldwide known for their efficiently costed products with
high quality. Many of the leading companies have emerged from the market of Germany, mostly,
in the fields of mechanical and electrical engineering, automobile industry and sector of medical
equipments. Here the foreign traders also receives the advantage of excellent human resources as
the effective education system turns to create competent professionals. Japanese products are
also some of the most demanded articles that are hold reputation in the German market. Japanese
products are popular for their intelligent designs, advanced cutting edge technology and
reliability to solutions. The German consumers are attracted towards the products manufactured
by the Japanese companies (Bodie, 2013). These are the major reasons why there are a high

number of steadily growing Japanese firms being established with their presence by opening
their own subsidiaries in the German market, mainly in the areas of Dusseldorf, Frankfurt,
Cologne and Munich. The investment friendly climate they are benefited with, the availability of
skilled and well trained human resources and a highly aware market in case of quality of the
products and strength in terms of finance (Titman, Keown and Martin, 2011).
During the period of October to December in the year of 2016, the estimated total number
of domestic companies and cross border mergers consisting the acquisitions, which have been
successful are involving UK companies, that are relatively remaining flat when compared with
the performance in the quarter 3 of the same year. During the whole year of 2016, the number
of successful inward and domestic mergers and acquisitions with the involvement of the
companies in United Kingdom have been showing notable hikes with the exhibition of highest
level of mergers and acquisition activities in the year of 2008 and 2011. In the year of 2016,
there were 227 mergers and acquisitions that were inward and are worth £187.4 billion. It made
the highest annual number since the year of 2011 and with the most above value in the annum
since the first published mergers and acquisitions data and statistic since the the year of 1969.
during 2016, there were a number of total 400 companies which are domestic mergers and
acquisitions with a total of a successful £23.9 billion (Iatridis and Rouvolis, 2010). It was a
highest valued number since 2008.
Since the year of 1985, more 0.3 million transactions from the side of mergers and
acquisitions have been announced within a value which is known and is almost about $33,200
billion. In 2015, there has been one more new record broke with the transaction terms being
valued at $2,410 billion which is at a rate of 12% increase over 2014. the recorded number of
deals that took place in the year of 1998 where there were more than 14,800 transactions that had
already been announced. The compound annual growth rate for the number of deals for the year
of 1985 to 2015 was of 4.63% while there was a growth in the value at the rate of 6.51%. the
current situations and trends in 2016, suggests that there will be a decrease in mergers and
acquisitions in the year.
2) Possibilities of international harmonisation occurring in the merger and acquisition field
The number of merger and acquisitions activity is usually visible as a benchmark for the
whole economy's health, so there would be no surprise for such deals are at highest point than

any duration since there was a downturn struck in the year of 2007. the following are some major
benefits occurred in the industries and economy in the economy:
 The mergers and acquisitions volume are in the process of growth, meaning more Human
Resources and teams are benefited with thoughts about integration and benefits to have
above propositions (Atkinson and Messy, 2011).
 And once a business is left alone after leaving it being acquired by an organization, the
benefits are with the left alone firm, in case now this is less common.
 Integration is a decision taken by employees and they will need to decide how the
harmonization is to be done, up or down, or use utilize this opportunity for all the benefits
to be reviewed and a new suite to be implemented.
 Communication is important to be effective, certainly with those people who would be
acting worse under the new system (Ageron, Gunasekaran and Spalanzani, 2012).
There has been a lot of differences made in the world since the nations are being
liberalized. The liberalization has introduced the freedom to be open for the foreign countries
welcoming them to start-up their operations in the country which has been liberalized. There had
been a lot of struggles for some particular nation to introduce liberalization in the national
economy. In some nations liberalization was introduced with the process of globalization, where
the nations were suggested to communicate with the economies of every nation and fulfil their
demands by bringing and taking them from the countries who produced the products.
Globalization showed some countries the face of development and growth in the forms of the
national economy and it helped in bringing up with a lot of changes in the markets in various
countries. Since, the international financial management term has been popularized among the
economies of the nations, the national economies of many nations got a chance to introduce their
major sector of industry where they could emerge in international trade.
The nations which are geographically located in two different corners of the globe are
also communicating and contacting each other in relation to the international marketing
strategies amongst them. The nations have been signing contracts with each other so that the
trade market and national economy could upgrade giving more options to the consumers in the
country. Choices provided to the customers in a sector of national market will be increased in
numbers as there would be new firms introducing the products in the market soon as the process

of globalization is applicable in the economy. The nations will start organizing summits and
meetings at different venues in both the countries in order t discuss the lack and surpluses in their
own home countries and strategies in order to meet the needs of the customers in both the
nations. The nations are proving to be in friendly relations and are considered to be trading
partners in such cases where they are a part of international financial management. The nations
in such cases get closer and start helping each other in other sectors too, like as education and
other social matters. They start organizations that are to accomplish targets of making a better
environment, not just in terms of money but in terms of social effectiveness too. The citizens of
both the countries will have government assistance to employment in both the countries. There
will be a form of peaceful relationship between both the nations and the citizens in the countries
would lead a harmonious life.
CONCLUSION
The points to be known related to the international finance management have been
discussed in the project. The meaning of the term 'international financial management' and its
aspects have been included in the discussion too (Jarvis, 2011). The trade regarding relations
between Germany and Japan is also in a part of the project. Germany and Japan are having
wonderful opportunities of serving the consumers in each other countries with advantages of vast
geographical coverage, technological advancement and well educated and trained human
resources available for the companies. The people have been benefited in various ways in
concern in financial matters and social effects.

REFERENCES
Books and Journals
Madura, J., 2011. International financial management. Cengage Learning.
Bekaert, G. and Hodrick, R.J., 2009. International financial management (p. 809pp). Upper
Saddle River, New Jersey, NJ: Pearson Prentice Hall.
Bodie, Z., 2013. Investments. McGraw-Hill.
Titman, S., Keown, A.J. and Martin, J.D., 2011. Financial management: Principles and
applications.
Iatridis, G. and Rouvolis, S., 2010. The post-adoption effects of the implementation of
International Financial Reporting Standards in Greece. Journal of international
accounting, auditing and taxation. 19(1). pp.55-65.
Atkinson, A. and Messy, F.A., 2011. Assessing financial literacy in 12 countries: an
OECD/INFE international pilot exercise. Journal of Pension Economics and Finance.
10(04). pp.657-665.
Ageron, B., Gunasekaran, A. and Spalanzani, A., 2012. Sustainable supply management: An
empirical study. International Journal of Production Economics. 140(1). pp.168-182.
Jarvis, D.S., 2011. Race for the money: international financial centres in Asia. Journal of
International Relations and Development, 14(1), pp.60-95.