Question

Headlines of failed mergers, stalled mergers, pending mergers or completed mergers abound. "Data from Thomas Reuters has revealed that the first six months of 2018 saw a record $2.5tn in mergers", (Dyble, 2018). As our economies become more intertwined, merger activity is on the rise. When a U.S. based organization is considering merging or acquiring a foreign organization, what factors beyond the cost of the transaction must be considered?

Answer 1

The reasons for merger with other corporations or acquiring a foreign organization can be due to strategic reasons, which can be due to following reasons

1. The merger or acquisition will give the company access to new market , which can be domestic market where the company does not have any marketshare or entry in new markets in terms of foreign countries by way of acquisition of foreign companies
2. One of factors for mergers or acquisitions is acquiring patented technology , now a days the differentiation in market leadership is technology , which results in
   1. low per unit product cost
   2. Less or nil carbon emission and be viewed as environmental friendly company
   3. Efficient use of resources
3. One of factors is acquiring skilled and specialist human resources , this is applicable in industry segments of research and development of drugs , space missions , Information technology companies specializing in artificial intelligence
4. One of factors is acquiring already established supply chain distributions network