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?