Advantages Disadvantages and Roles of International Mergers and Acquisitions
It is evidently clear from the discussion that acquisitions refer to a process in which a company transfers the control operations and management to another company and of becomes unit of the acquirer. Acquisitions are run by the same name of the company, which has greater financial power in terms of stocks and shares. Mergers refer to the operational and management combination of two firms to create a new legal firm. Two merged firms lead to increased core strength and operational synergy, which position them on an international market. Mergers and acquisitions provide a potential feature to leverage superior organizational capabilities, enhance market power, reduce costs, and access complementary resources. A number of Mamp.As theories and concepts have been developed such as empire building, disciplinary and synergistic, hubris hypothesis, and market power gain, which are not mutually exclusive because a firm can decide to gain market power and at the same time focused on building an empire. According to Ferreira, Santos, Almeida, and Reis, firms have diversified reasons for implementing the Mamp.A including possible contributions of becoming global firms through attaining synergy value, better international market position, and broader market access. ATamp.T is a multinational firm that offers telecommunications services. Recently, the company acquired Direct TV to form a firm that would cater for a new telecom and television needs as well as developing the company into and global organization offering telecommunication services to China, United States, and the rest of the world. Synergistic Mamp.A framework compromises of managerial, financial, operational, and market power market topologies. International mergers and acquisitions are associated with various advantages linked to the Mamp.As theories, which also play as the key drivers towards a company’s breakthrough in the international market. The advantages range from the financial aspect of the workforce that contributes towards the achievement of international goals set by the firm. Some advantages to the buyer (acquirer) may be the disadvantage to the seller and vice versa.