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A new M&A wave and its impact

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Frame of Image ade Commission. Third, purc h a s i n g a ready-made units can dramatically decrease entry costs into new markets because a n acquirer is able to avoid learning costs. Fourth, M&A is directly associated with the scale economies as well as the economies of scope. In other words, firms can easily diversify into non-related fields and can increase their size through mergers and acquisitions, which indicates that M&A is an effective strategy for diversification. Historically, there were five M&A waves. It was not until the 4th M&A wave that efficiency gain was stressed as the outcome of M&As, whereas horizontal and vertical M&As were the major interests before the 3rd M&A wave. The post1995 is classified to be the 5th M&A wave, which focuses on the strategic M&As for rapid size growths of global MNEs. Accordingly, the frequency of world M&As has sharply increased till 2000 and M&A cash flows show an identical patter n. T h e r e are distinctively two M&A waves in Korea. The IMF financial crisis in 1998 has initiated the 2nd wave. Before the crisis, most M&As were done by manufacturers; however, the number of M&A deals by service firms started to dominate that of manufacturers ex post 1998 and the volume of M&As has soared up as well. The market boom of IT and financial industries accelerated M&As in these industries. An eye-catching change during the 2nd wave is that the major firms, i.e., Hynix, KT&G, and POSCO, are under hostile M&A threats. As the Korean stock market is u n d


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Title A new M&A wave and its impact
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Material Type Reports
Author(English)

Yim, Hyung Rok

Publisher

[Seoul]:Korea Institute for Industrial Economics & Trade

Date 2007
Journal Title; Vol./Issue KIET Industrial Economic Review:vol. 12(no. 2)
Pages 9
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Industry and Technology < Entrepreneurship
Holding KIET; KDI School

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