Mergers and Acquisitions Questions and Answers

Start Your Free Trial

What are the main benefits and pitfalls of going global via mergers and acquisitions?

Expert Answers info

Lynnette Wofford eNotes educator | Certified Educator

calendarEducator since 2011

write7,054 answers

starTop subjects are Literature, History, and Business

The main benefit of going global via mergers and acquisitions is that you expand your business into new regions by acquiring the staff and experience necessary to be successful in those regions. Rather than needing to train North American staff to work in India, for example, you assimilate staff familiar with local language, customs, markets, regulatory and business environments. Often your global staff brings to you important synergies that can improve your performance in your core markets, including skills in low-cost production.

The first pitfall is that if you do not have expertise in a region, you may not be in a position to do a good job of selecting a target for a merger or acquisition. Another issue is that it is extremely difficult to integrate disparate corporate cultures and you may not gain full benefits from potential global synergies.

check Approved by eNotes Editorial