The merger wave, which in 1998 was in USA, now came into the Europe. Cross-border deals are expected as firms go global. In many cases this consolidation makes sense. But past merger waves have shown that only one deal of three has worked. Success depends on what will happen after the deal. When the deal is done, it means that companies will cut costs and increase revenue.
International mergers and acquisitions are performed for the purpose of obtaining some strategic benefits in the markets of a particular country. International mergers and acquisitions play an important role behind the growth of a company. These deals or transactions help a large number of companies penetrate into new markets fast and attain economies of scale. They also stimulate foreign direct investment.
It’s difficult to merge issues in culture. Two things made culture clashes harder to manage. The first is the growing importance of intangible assets. The second new thing is the number of cross-border mergers.
So the things that are so impressive about today’s mergers could work against them if the economy turns down.