chapter  10
41 Pages

Mergers, acquisitions and corporate control

The reasons for this chapter’s inclusion in our book are so varied as to make it almost unreasonable to ask ‘Why discuss M&A?’ The topic is controversial, important in Asia as never before, and contains many facets of fi nance that are worthy of analysis, as well as the intensely human factors of ambition and hubris. The problem is that M&A is also subject to narrow anti-competitive nationalism, to corporate behaviour that is often irrational, and confounds scholars of fi nance and governance as to its post-execution value-added, if any. Corporate change clearly seems to benefi t acquired companies and their former shareholders, directors, fi nanciers and advisors, but we struggle to assess its value to successful bidding companies and their shareholders, to stakeholders such as employees and customers, and to the economy at large. M&A must have some other purpose, if not one that can be gauged objectively, perhaps as part of Schumpeter’s myth of creative destruction?