July 16, 2010Mergers and Acquisitionsby EconomyWatch

International Mergers and Acquisitions

About International Mergers and Acquisitions

International mergers and acquisitions are growing day by day. These mergers and acquisitions refer to those mergers and acquisitions that are taking place beyond the boundaries of a particular country. International mergers and acquisitions are also termed as global mergers and acquisitions or cross-border mergers and acquisitions.

Globalization and worldwide financial reforms have collectively contributed towards the development of international mergers and acquisitions to a substantial extent. International mergers and acquisitions are taking place in different forms, for example horizontal mergers, vertical mergers, conglomerate mergers, congeneric mergers, reverse mergers, dilutive mergers, accretive mergers and others.

International mergers and acquisitions are performed for the purpose of obtaining some strategic benefits in the markets of a particular country. With the help of international mergers and acquisitions, multinational corporations can enjoy a number of advantages, which include economies of scale and market dominance.

International mergers and acquisitions play an important role behind the growth of a company. These deals or transactions help a large number of companies penetrate into new markets fast and attain economies of scale. They also stimulate foreign direct investment or FDI.

The reputed international mergers and acquisitions agencies also provide educational programs and training in order to grow the expertise of the merger and acquisition professionals working in the global merger and acquisitions sector.

The rules and regulations regarding international mergers and acquisitions keep on changing constantly and it is mandatory that the parties to international mergers and acquisitions get themselves updated with the various amendments. Numerous investment bank professionals, consultants and attorneys are there to offer valuable and knowledgeable recommendations to the merger and acquisition clients.

Methods of Financing International Mergers and Acquisitions

Usually, the following methods are implemented for funding international mergers and acquisitions:

  • Financing (or taking loans)
  • Cash
  • Factoring
  • Hybrid Financing

    Significant International Mergers and Acquisitions

    Following are the instances of the major international mergers and acquisitions:
     

  • The merger of British Petroleum (BP) with Amoco (erstwhile Standard Oil of Indiana)
  • The acquisition of Mannesmann AG by Vodafone Airtouch PLC
  • The merger of Exxon with Mobil (The name of the company formed as a result of the merger is ExxonMobil)
  • The acquisition of AirTouch Communications by the Vodafone Group
  • The acquisition of Compaq by Hewlett-Packard
  • The acquisition of Shell Transport & Trading Company by Royal Dutch Petroleum Company
  • The merger of Bank One Corporation with JPMorgan Chase & Company

    Factors Affecting International Mergers and Acquisitions

    The following elements influence the international mergers and acquisitions from many aspects:
     

  • Corporate governance
  • Company acts
  • The capacity of average workers
  • Expectation of the consumers
  • Political features of a country
  • Tradition and culture of a country
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