Mergers and Acquisitions have become a very common phenomenon in the present business environment.I want to know about the factors to be kept in mind while going for international mergers and acquisitions.
Read the following article:
http://www.emeraldinsight.com.ezproxy.uta.edu/doi/full/10.1108/02580540910936350
A Model of the Influence of Culture on Integration Approaches and International Mergers and Acquisitions Performance .
M&A always result in lay-offs as directors in the acquiring company seek to show that the acquisition was worth-while, and that is often by increasing revenues/ profitability which is easier to achieve by reducing costs, and this is often by reducing labour costs. Cross-border M&A will often pose culture-related problems -- that culture-triggered problems have to be reduced.
Further, people fearing loss of jobs will leave -- and these often are the better, more talented ones, and with it the intellectual capital is lost. Acquiring managers are unlikely to know the actual IC of different employees. You can guess what that means. I think the loss of IC is a very significant problem, not often recognised by the acquiring company. This was what happened at the US company I worked for. The acquiring company saw many people leaving. I too left after about 18 months, having turned down the idea of moving to the HQ in another country, to take on a more senior role.
May be it is one experience, or my experience, and it may not hold true in all cases...
Differences in cultural styles and lifestyles - also legal and tax issues surrounding cross border transactions
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