1. Introduction
In our days mergers and acquisitions are a predominant feature of the international business system as companies attempt to exploit new market opportunities and to strengthen their market positions. Each year sets a new record for the total value of mergers and acquisitions and nearly every day new announcements are made in the business newspapers.
In the literature one finds a large number of explanations for the occurrence of mergers and acquisitions. Sometimes, these explana-tions are also applicable to related forms of interindustrial links such as joint ventures or strategic alliances. Therefore it is necessary to define the term merger and acquisition as it will be used throughout this seminar paper.
1.1 Definition of the Term Merger and Acquisition
Two different phenomena are described by the term merger and acquisition. A merger is a combination of two corporations in which only one survives and the merged corporation goes out of existence. It is a unification of two or more firms into a new one and thus characteri-zed by the fact that after unification there are fewer firms than before. On the contrary can the target firm after an acquisition either remain autonomous or be partially and/or wholly integrated into the new parent company. However, from a legal point of view the firms remain independent entities.
In most of the cases, one company acquires the majority or minority equity stake in another which is not a true merger in the legal sense. The two companies are not legally united, but form an economic unit where both remain legally independent, a so-called quasi-merger. The term acquisition mainly is used when more than 50% of ...