Issues in Cross Border Mergers and Acquisitions:
Commonly identifiable issues in mergers and acquisitions are as follows:
LEGAL ISSUES:
Legal uncertainty- Cross border mergers and acquisitions involve a number of legal issues which are governed by the Company law, self-regulations, market regulations and other local rules. Though the bid looks friendly, legal issues in cross border mergers and acquisitions may not only be disadvantaged by lack of information to foreign companies but also the incompatibility of foreign companies which might result in deadlocks.
Opaque decision making process- Few companies also consists of complex legal set up which makes the decision making process difficult for the companies situated in other countries …show more content…
IMPLICATION OF SUPERVISORY RULES AND REQUIREMENTS:
Concerns regarding the financial stability- As mentioned earlier the operations of financial sectors differ from country to country, which makes it uncertain for the regulators to analyse the financial stability of the company and delays in the imposition of certain measures or to exercise a veto against the proposal.
Misuse of supervisory power- The Company that holds the power for approving the changes in the shareholding is usually seemed to be misused which is a rising issue in cross border mergers and acquisitions.
Supervisory approval process- First of all the complexity of who should approve the decisions taken is a very difficult task or challenge for both the companies. The approval might be required from a numerous supervisors which is complex and delays the approval process and adds on to the overall …show more content…
Political interference in host countries need not just be from the government or political institutions but can also be from minority groups.
Employee’s reluctance- The attitude and acceptance of employees also play a major role in the successful outcome of a cross border deal. Employees become reluctant towards being managed by other company from a different country.
Consumers mistrust in foreign entities- Consumer acceptance of foreign entities will help the companies to gain the market power in no time. But consumers generally mistrust foreign entities, due to lack of proper knowledge about the company or could be failure of the domestic company because of which foreign companies prefer to keep the local brand even though it may take a long period of time for the transition from one brand to
Commonly identifiable issues in mergers and acquisitions are as follows:
LEGAL ISSUES:
Legal uncertainty- Cross border mergers and acquisitions involve a number of legal issues which are governed by the Company law, self-regulations, market regulations and other local rules. Though the bid looks friendly, legal issues in cross border mergers and acquisitions may not only be disadvantaged by lack of information to foreign companies but also the incompatibility of foreign companies which might result in deadlocks.
Opaque decision making process- Few companies also consists of complex legal set up which makes the decision making process difficult for the companies situated in other countries …show more content…
IMPLICATION OF SUPERVISORY RULES AND REQUIREMENTS:
Concerns regarding the financial stability- As mentioned earlier the operations of financial sectors differ from country to country, which makes it uncertain for the regulators to analyse the financial stability of the company and delays in the imposition of certain measures or to exercise a veto against the proposal.
Misuse of supervisory power- The Company that holds the power for approving the changes in the shareholding is usually seemed to be misused which is a rising issue in cross border mergers and acquisitions.
Supervisory approval process- First of all the complexity of who should approve the decisions taken is a very difficult task or challenge for both the companies. The approval might be required from a numerous supervisors which is complex and delays the approval process and adds on to the overall …show more content…
Political interference in host countries need not just be from the government or political institutions but can also be from minority groups.
Employee’s reluctance- The attitude and acceptance of employees also play a major role in the successful outcome of a cross border deal. Employees become reluctant towards being managed by other company from a different country.
Consumers mistrust in foreign entities- Consumer acceptance of foreign entities will help the companies to gain the market power in no time. But consumers generally mistrust foreign entities, due to lack of proper knowledge about the company or could be failure of the domestic company because of which foreign companies prefer to keep the local brand even though it may take a long period of time for the transition from one brand to