Shimizu et al. (2004)

Question 1

Why cross border M&A

Answer 1

Massive growth due to industry consolidation, privatization, and liberation of economies
- Cross-border M&As present opportunities for firms to access new markets, expand their existing ones, and acquire new knowledge and capabilities
- unique challenges such as differences in national culture, customer preferences, and institutional forces

Question 2

Cross border M&A as mode of entry

Answer 2

The choice of entry mode is influenced by a range of factors including firm-level factors such as multinational experience and product diversification, industry-level factors such as technological intensity, and country-level factors such as market growth and cultural distance

Question 3

Cross border M&A as a dynamic learning process

Answer 3

• Due diligence, more complex and understanding of target environment is required
• Negotiation process, can make or break the deal
• Integration process, major challenge as cultural differences can be high

Question 4

Cross border M&A as a value-creating strategy

Answer 4

cross-border M&As can create wealth for both the acquirer and target firm shareholders, but the success of these deals depends on a variety of factors.

These factors include the acquirer’s internal resources, such as R&D intensity and management quality, as well as external factors such as the strength of the acquirer’s home currency and industry advertising intensity.

Additionally, the success of cross-border M&As can be influenced by previous experience and the degree of learning achieved from that experience, as well as the strategic decision-making and entry mode choice of the firm.

Overall, the success of cross-border M&As is dependent on both internal and external factors.