Analysis On The Theoretical And Practical Aspects Of Merger Of Companies

There are many causes for the merger of companies. Different environment at different time has different motives of merger. Those often mentioned includes cutting cost, reducing competition, entering market, synergies.... "To grow and enlarge scale by merger" becomes the company's credo. However, "big" does not equal to strength and does not mean to create value. Reality is always distant from that conceived. Success is not easy to achieve. By reviewing the real case, a research is made on the application of merger theories in practice and the actual changes in sales, profits, assets, liabilities, share price, personnel and business activities which reflect the results of the merger strategies. The success or failure of a merger depends on its outcomes. Post-merger integration is most critical to these outcomes. What are the mistakes made in the process? Cross-border mergers occur accompanying globalization making up unprecedent large-scale multinational companies which have to face more difficulties and challenges, and so have greater risk. Cultural and management issues are more prominent in such companies. If corporate leaders cannot solve the problems promptly to cope with the integration, the process has to be extended leading to long-lasting threats, obstacles and disasters. Profitability, competitiveness and even existence of the company will be affected indeed. Merger continues to take place and experience accrues persistently. Nevertheless, failure is still common for a merger. Managers have to learn the way of a success merger from this.After participating in numerous small and large mergers, DaimlerChrysler emerges as a global corporation in the auto manufacturing industry. Its experience and the development of the auto industry demonstrate path and suggest strategies for China auto companies which are established in protected market with smaller scale and mass in number.