Chapter 2

Mergers, Acquisitions and Corporate Restructuring

Research has shown that mergers and acquisitions (M&As) are effective means of entry into high-growth markets, generating cash in the short run, gaining advantages over the competitors without expanding production capacity. Furthermore, it is argued that M&As are efficient methods of acquisition of expertise, new technology, products, brands, and skilled employees. It is also believed that M&As reduce risks and assist internal product and process innovation (Brock 2005).

To set the foundation for the subsequent discussions of M&A, in this chapter, we will define terminologies of mergers, acquisitions, and corporate restructuring, discuss motives for M&As, identify risks associated with ...

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