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Introduction – Mergers and Acquisitions
The management of corporate organization has been one of the challenging tasks in the business world today. Following the emergence and development of globalization, liberalization of markets and tremendous growth in technology, a high level of competition in business world has yielded up. This is so because the world population has been put in a common platform characterized by speed communication and close interactions thus heightening business activities. With reference to this situation, corporate managers are forced to adopt the most competitive and efficient strategies so as to guarantee there survival and success in the market. Mergers and acquisition has been identified as one of the best corporate strategies for countering stiff competition in the business world.
Basically mergers and acquisitions which are abbreviated as M&A is an aspect of corporate strategy, management and corporate finance dealing with selling, buying, combining and division of companies to enhance performance.
The discussion and analysis concerning the issue of mergers and acquisitions has demonstrated the developments in the corporate world. Being a corporate strategy, M&A help business to attain higher performance through market share, economies of scale and diversification. The current state of competition in the corporate world is unbearable thus calling for the adoption of efficient strategies like M&A. nevertheless, M&A have not be positively perceived as far as the EU corporate law is concerned.
This is based on their negative impact on free competition. Presently high levels of M&A activities have been reported which are characterized by mega deals of cash. With reference to the benefits of mergers and acquisition to the performance of the business, there is need for its adoption. Nevertheless, strict regulations should be put in place to control recklessness in M&A activities following their negative influence on free competition.
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