MERGER AND ACQUISITIONS
MERGER AND ACQUISITIONS
Since the second half of the 1980s capitalism has witnessed the exponential growth of Mergers and Acquisitions (M&A) between large companies. According to ctlinternational the peak was reached in 2007 with the value of the transaction being worth almost $5000 bn  (a striking number considering that it shows a 170% increase from the transaction value of the M&As in year 1985). After the 2008 financial crisis, the value of the M&As has slightly decreased but in the last years there have been signs of recovery.
The increase in MAs demonstrates two important trends:
-The growing impact of financialisation. Short-term financial profits from financial operations (like an M&A) are becoming more popular than long-term investments in the real economy.
-The concentration of capital in a few but really powerful corporations.
Another trend, often too much ignored, is the Chinese acquisition of important Western companies in the last few years- for instance ChemChina’s acquisition of the Swiss biotech giant Syngenta AG for $43 bn. Concerns have grown among Western officials that China’s acquisition trend may allow the Chinese government to gain more and more access to sensitive information.
Unsurprisingly President Obama blocked a Chinese company’s (Fujian) takeover of Aixtron (a German semiconductor company). Obama’s intervention is due to the fact that Aixtron delivers crucial semiconductors for the construction of American missiles; therefore Obama blocked the deal for purely security reasons.
NOTABLE EXAMPLES of M&As:
-2016 Microsoft’s acquisition of Linkedin for $26 bn.
When Corporations think about entering ‘exotic’ markets (that is markets with high levels of uncertainty and risk) they might pay consultants in the field of ‘business intelligence’ to gain special information on those markets. A notable firm in this field is Hakluyt, which was founded by former British intelligence officers. A 40-pages report from Hakluyt could cost £100,000 . Hakluyt gains special information by using a network of informants (diplomats, business people, former spies…) in the country in which the client is interested in .
To win big contracts in foreign countries corporations may resort to bribery.
-In 2017 Rolls Royce admitted paying bribes to win deals in Thailand, Indonesia, China and Russia .