Cross-Border Mergers And Acquisitions: Importance, Issues And Challenges

Shreya Moonka, BBA LLB, Xavier Institute of Management, Bhubaneswar

ABSTRACT

The important objective of a merger or acquisition between two businesses is frequently to increase the scope of their offerings in foreign markets and increase their company's commercial presence there. These initiatives do, however, present certain difficulties because of the organizational and national cultures of the target companies. These difficulties might be caused by variations in the host nation's legal framework, tax laws, or cultural norms, all of which can make cross-border mergers and acquisitions more difficult. In order to effectively penetrate a variety of markets, businesses need to carefully evaluate every facet of the transaction, being careful not to miss any unfavorable consequences. This entails determining and evaluating a number of variables, such as the target firm's location and cultural quirks. The agreement might fall through if these obstacles are not sufficiently assessed.

The study goes into great depth to examine the fundamental causes of the problems that businesses face during international mergers and acquisitions. Moreover, it provides suggestions and tactics to significantly lessen these difficulties while executing international mergers and acquisitions. Companies gain a great deal from M&A operations in terms of the legal elements of cross-border mergers and acquisitions. These benefits include access to resources, greater revenue, product diversity,economies of scale, and market domination. India's M&A sector has shown encouraging signs in recent years, and several major local and foreign companies have adopted this development approach. In cross-border mergers and acquisitions, a company targets foreign firms.