Expansion and Merger



Expansion and Merger

Merger is a formal process of two or more firms getting into a union to form into a single entity for the assets and liabilities transferred by the selling firm and absorbed by the buying firm. The main benefit of mergers and acquisitions is that the acquiring firm considers the merger or takeover as a profitable investment. Secondly, there can be a reduction in the expenditure of the both merged companies.

Question 1. Explain why government regulation is needed, citing the major reasons for government Involvement in a market economy.

It is significant for the companies and organizations to concern all legal and law regulatory authorities before mergers and acquisitions. There are comprehensive requirement that authorizes the company to intervene in any action that could lead towards merger and acquisition. This is for the benefits for all the organization in case for instances in some mishaps the government could take some legal actions against the transaction. The other thing is that there are certain laws, in case of the international mergers, the tax policies and trading policies should be practiced in order to regulate and the actions can be practiced easily. This is done in order to do the system aligned so that all the beneficiaries could follow the same standardized rules and regulations (Malcolm, 2006).

The government intervention has been considered as the most common phenomena that the governments of the developed and developing countries adopt for the redistribution of welfare among the poor segments of the society. The role of government in distributing the benefits to the needy families is crucial. The government intervention plays an important role in the history of many countries. The developed countries have made progress by making such policies with the help of governments. Redistribution of income or benefits in the economy has remained the main tool for the policy makers to sustain the economic development in the country. But it is important that these policies must be implemented by the government authorities as they have power to do so.

Question 2. Justify the rationale for the intervention of government in the market process in the U.S.

Market processes are the most complex process in terms of mergers and acquisitions in the U.S; this is the reason why the government of U.S focus more on mergers and acquisitions of market processes. The government could also intervene in order to regulate the resources and allocate the right amount of the resources for the improvement in the economies and social welfare. The government wanted to improve and correct the failures that have been taking place all over the market, and to distribute the resources and the income equally in the market place. The government also intervenes in the market process with the intention to improves and enhances the performance if the economy (King, 2004).

The government intervenes in the market process in two ways, firstly the government can put legislations and regulations, secondly they can out the direct state provision of goods and ...