The Impact of 2008 Financial Crisis on UK's Cross Border Mergers - Dissertation Example

II.2 Cross Border Mergers as a Mode of Entry in a Foreign Market ………………………………………… 12 II.3 Cross Border Merger as a Value Creating Strategy .. 17 II.4 Impact of Financial Crisis in the Field of Investment Through Cross Border Mergers in UK ……………….. 20 III. Research Methodology ……………………………………..….. 24 IV. Research Findings and Analysis ……………………………….. 28 V. Conclusion and Recommendations …………………………….

39 References …………………….……………………………………………… 42 – 46 Chapter I – Introduction A merger is a business process by means of which, two or additional number of companies can pool their business assets and form a single organization. In general, the stocks of the parent companies’ are given up. Instead, the stock of a new company is issued. For instance, when the Daimler-Benz and Chrysler merged, both the companies stopped to exist and in their place Daimler-Chrysler was formed.

Cross border mergers are those mergers wherein the involved companies are set up in different countries. Over the years, this type of merger comprises of a growing percentage of all the mergers. In general, cross border mergers can happen through either inward cross border mergers or outward cross border mergers. In an inward cross border merger, the entire or parts of domestic companies are put up for sale to overseas investors. This often results to inward movement of capital. In the case of an outward cross border merger, domestic companies tend to purchase the entire or segments of foreign companies.

This often results to an outward flow of capital (Organisation for Economic Co-operation and Development. Economic Analysis and. The findings of this research will provide insight of a merger as a business process by means of which, two or additional number of companies can pool their business assets and form a single organization. In general, the stocks of the parent companies’ are given up. Instead, the stock of a new company is issued. For instance, when the Daimler-Benz and Chrysler merged, both the companies stopped to exist and in their place Daimler-Chrysler was formed.

Cross border mergers are those mergers wherein the involved companies are set up in different countries. Over the years, this type of merger comprises of a growing percentage of all the mergers. In general, cross border mergers can happen through either inward cross border mergers or outward cross border mergers. In an inward cross border merger, the entire or parts of domestic companies are put up for sale to overseas investors. This often results to inward movement of capital. In the case of an outward cross border merger, domestic companies tend to purchase the entire or segments of foreign companies.

Cross-border mergers are a very significant occurrence in the global economy. In fact, cross-border mergers encompass more than 50% of all the foreign direct investment that is taking place around the world (Gugler et al. 2003). In most cases, companies enter into a cross border merger activities for the following reasons: (1) to intensify the company’s position in the global markets; (2) expand the business; (3) get hold of other company’s complementary resources; and (5) to improve the company’s efficiency in the global markets.