Module 5 Session Long Project: Mergers, and Acquisitions

Module 5 Session Long Project: Mergers, and Acquisitions

Choosing a Company for Merger

At the present time is extremely important to find ways of effective interaction of corporate governance and economic growth. Most experts agree that, in the continuing search for effective principles of formation and functioning of a market economy in Russia is increasing the relevance of studies on possible ways and means of restructuring the entire investment process, and, above all, at the level of enterprises and companies, where the greatest and most clearly manifest problems of implementation of industrial and investment policies (Gaughan, 2001).

With all the variety of institutional conditions for the behavior of corporations in each country there is a process of formation of the institutional environment, which reflects the level of its economic development, socio-cultural and historical features. Therefore there is a need for cross-country comparisons of regularities of formation and evolution of the institutional conditions for the existence of market relations and forms of their relationship with the investment behavior of corporations.

Combinations of types of businesses can take any shape. From the standpoint of control, investment and commitment mergers and acquisitions are the most "hard" forms of integration. Less radical form of association - a joint venture, usually implying the formation and mutual ownership of the company by two other companies, most often used to achieve local objectives (Gaughan, 2001). The most “soft” form is considered to be an alliance, which is a formal joint project of two independent companies, implemented to perform a specific task. Other forms of inter-organizational interactions, such as franchising, licensing and transfer, etc., can be considered as an additional tool in a variety of forms of business integration. Thus, mergers and / or absorption, affecting all aspects of the company, have the most complicated procedure of the transaction and, ...