Korea M&A Corporation

Why do companies pursue M&A? 본문

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Why do companies pursue M&A?

Korea M&A 2006. 10. 18. 08:34

Do you know why such so many M&As have happened in the world?
What's your idea?
Easily think of it.
If they don't act M&A, then what things happen to them?
If their basic idea is not bad, then they can get enough money to operate company.
However, they can not give motives that investors invest that company.
It means investors would keep at a distance and neglect to invest it. so the price of stock would not be raised. That's all. No growth.
Surely they can pursue the growth of company with R&D or other ways.
But investors have no patience and like faster growth.
M&A is the best way to attract greedy and impatient investors.
Thereby most companies make 'dept. of corporate development' and wait for chance to get good company.
Most western companies pursue this way.
On the contrary, eastern companies (Japan, Korean) don't like this kinds of ways.
they make an effort R&D by themselves so stock markets are somewhat closed.
Because of it, the value of western company is higher than that of eastern company and stock markets of western countries are more vigorous.
We can not conclude western ways are better than eastern but M&A activates company's growth in many times.
So I think that eastern companies surely consider of M&A when they make growth plan and do it. they are not willing to do M&A on account of their customs (called it 'the eyes of others')
However, their customs are changing recently and occurred to vigorous M&A in this area. According to this environment changes, easter countries' government should prepair and fix their regulations.

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