The Global Financial Crisis and M&A

Kathleen Grave, Demos Vardiabasis, Burhan Yavas

Abstract


The global financial crisis is changing the landscape for mergers and acquisitions (M&A) and identifying new
M&A targets that indicate a shift with significant impact to our global business practices. Even more now than
ever before, companies are implementing strategies that include gaining access to new geographies. They are
responding to the crisis by focusing on growth outside their home country regions, expanding their geographic
diversification and investment in secondary markets. Previous M&A activity was focused in the triad of US,
Europe and Japan, the world’s largest consumer markets. However, as the triad’s share of the global consumer
market declines companies are looking to new consumer markets that are expanding and open for opportunity.
Our research examines the increased complexity and challenges that cross-border acquisitions need to address in
their effort to succeed globally in an environment of instability fueled by ongoing financial turmoil. New
development in formulating innovative deal structures and defining creative terms is apparent. Looking deeper
into the supply chain to identify acquisition targets is becoming attractive particularly in cross-border M&A to
diversify risk, and maximize control, efficiencies and productivity. Increasing the influence of shareholders,
maximizing legal arrangements and giving consideration to international political implications are all finding
their way into the acquirer’s deal structure. M&A advancement in growth markets augments global business
innovation and vitality in challenging economic conditions. Cross-border M&A is contributing to the change into
our macro global political, social and economic integration.


Full Text: PDF DOI: 10.5539/ijbm.v7n11p56

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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