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Failures of international mergers
3. What kind of things do you think can lead to problem or even failure in international mergers and acquisition?
a. The growing situation of M&A review in the world and Vietnam
- In the last decade, the global economy have been profoundly altered due to the economic liberalisation and technological change, in order to reduce barriers in trade and take advancement of technology.
- Only in the United States, over the past decade, merger activity has gone up from US$186 billion to US$1.79 trillion. Meanwhlie, the worldwide corporate merger activity totalled approximately US$3.4 trillion in year 1999, with M&A activity of US$2 trillion stated in the first half of year 2000 (quoted in EC Merger Control 10th Anniversary Conference, 14 september 2000)
- M&As have been and will continue to be major factors in both the U.S domestic and international business landscapes. Since 1983, there have been over 2500 M&As annually in US alone. The number of M&As among European firms has risen from 117
- In Vietnam, M&As have become eventfully for 2 recent years and topical question in financial market. In year 2005, there were, according to a statistics, 18 transactions equal US$61 million in value, and 32 transactions in year 2006, equal US$245 million, but in the first half of year 2007, the transactions were done to be 46, equal US$626 million. According to Ministry of Planning and Investment, there were 1.092 transactions equal US$16.8 billion counted until end of December 31, 2007.
Some typical transactions, in the beginning months of year 2008, are Indochina Capital Vietnam Holding bought 20% stocks of Ninomaxx – Viet Fashion Company; Goldman Sachs Corp. bought 30% stocks of Diana JS company, Sumitomo Mitsui Banking Corp (SMBC), VOF Investment Limited- British Virgin Islands, Mirae Asset Exim investment Ltd bought 25% charter capital of Eximbank

b. Things are able to lead to problem or even failure in international M&As
- In...