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International Business/Mergers and Acquisitions.

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QUESTION: Dear Prof Michael

http://en.wikipedia.org/wiki/Mergers_and_acquisitions

Examples :

1. Company A has been acquired by Company B.
2. Company A has been merged with Company B.

From the Employees perspective who are working in Company A, which among the two i.e. Acquisition OR Merger could be more risk prone from Job security point of view ?.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

ANSWER: From the perspective of employee job security, there's little difference between a merger and an acquisition.  A merger means that two companies are joining together to form a legally new business entity, while an acquisition means that one organization will actually own the other.  This line is often blurred, as was the case with Daimler-Chrysler, in which the two companies technically merged, but Daimler replaced much of Chrysler's management, took control over it's processes and decisions, and so forth - so although it was a legal merger, from a functional perspective it operated more like an acquisition.  No matter what the circumstances, though, when two companies combine into one, whether through a merger or an acquisition, there is very likely going to be a rearranging of operations and human resources to eliminate redundancies and improve synergy.  When assessing risk to employee job security, a better question would be how much of the operations between the two companies overlap - how many jobs are being performed at both companies currently but won't need double-staff after the two coalesce.

---------- FOLLOW-UP ----------

QUESTION: Dear Prof Michael

Thank you.

Can there be scenarios where mergers or acquisitions can take place between more than two companies  ?.

i.e. n > 2 where n = Company / Organisation / Corporate / Firm.

Example : n = 3

1. Company A is merged with Company B and Company C.

Company A is the Parent Co.

2. Company A acquires Company B and Company C.

Company A is the Parent Co.


In reality, Can this business transaction/s take place (n>2) ?.

i.e. 1 or 2 can also happen ?.

Or

Mergers and Acquisitions will always hold true for the equation n=2.


The following mentioned below are just hypothetical examples.

DaimlerChryslerAudi
MercedesBenzNissan
The Bank of Tokyo-Mitsubishi UFJ-HSBC Bank plc

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

Answer
Mergers can theoretically happen between companies n->infinity.

Here are just a few examples of mergers with more than 2 companies:
KDD corp, DDI corp, and IDO corp; 3-way merger of Japanese telecommunications companies

Tangshan Iron and Steel, Handan Iron and Steel, and Xinin Vanadium and Titanium; 3-way merger of Chinese metal companies

Creative BioMolecules, Ontongeny, and Reprogenesis; 3-way merger of US biotech companies

Mobidiag, Amplidiag, and Genewave; 3-way merger between US diagnostics companies

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Michael Taillard

Expertise

Available for questions about international finance, international economics, and some international management questions.

Experience

Consulting: American Red Cross; US Strategic Command; US Army International Transportation Logistics -- Lecturing: Bellevue University (Bellevue, NE) Huijia College (Beijing), OPII Schools (Omaha), Madonna University (Livonia), Schoolcraft College (Livonia), ZomBCon (Seattle), Zombiefest (Lincoln) -- Media Appearances: Dead Man Working (2012 Movie documentary), The Heartland News (Omaha local news outlet)

Organizations
American Economics Association, Business Networks International, Midwest Writer's Guild, Zombie Research Society

Publications
Economics and Modern Warfare: The Invisible Fist of the Market (Palgrave Macmillan) -- 101 Things Everyone Should Know about Global Economics (Adams Media) -- Corporate Finance for Dummies (Wiley) -- Psychology and Modern Warfare (Palgrave Macmillan)

Education/Credentials
PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

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