THE ECONOMIC EFFECT OF THE PROCESS OF MERGERS AND ACQUISITIONS OF ENTERPRISES - Наукові конференції
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THE ECONOMIC EFFECT OF THE PROCESS OF MERGERS AND ACQUISITIONS OF ENTERPRISES

30.11.2017 09:58

[Секція 1. Економіка, організація і управління підприємствами, галузями, комплексами]

Автор: Katsovets Alina Vladimirovna, student of the group ZEPmh, Kyiv National University of Technologies and Design


Mergers and acquisitions are an important direction for company growth and an effective stimulus for changes in the economy. Due to the absorption of the company into ownership of more effective owners and managers, as a result, increases the efficiency of the use of assets, creates a significant economiceffect for investors as well as for the economy as a whole.

This effect can be observed in improving the financial and production performance of enterprises involved in the merger.

Mergers and acquisitions are a popular strategic development for expanding companies. It allows him to access markets, products, technologies, resources and managerial skills more quickly and with less risk than his own creation.

Successfully complete the merger or acquisition is not easy, because it is not just an agreement to create a new company by combining two or more existing enterprises in order to achieve the desired (or at least expected) profitability and strategic goal realization.

In order for the merger or acquisition to be successful, it is necessary to realize the ten basic principles of their conduct. Of course, their compliance does not guarantee a one-hundred percent guarantee of success, but the chances of a timely and more or less successful completion of integration will significantly increase. Consequently, these principles are reduced to what needs to be done: 1. Conduct a comprehensive survey of the target company, which is absorbed, at least in the areas of financial activity and human capital; 2. Identify the required or desired degree of integration; 3. Make key decisions quickly, without waiting for the full information to be received; 4. To attract and attract top managers to your side; 5. Clearly define the main approaches to integration; 6. Appoint an Integrated Management Manager with a common respect and form his team; 7. Create a design team of energetic and capable employees.

The advantages of merger processes are: the combination of complementary resources of the merged enterprises; saving on fundamental research through the merger of research bases; obtaining additional sales channels; increase of market value of business; diversification and risk reduction. Unfortunately, most national producers are characterized by low competitiveness, and on the basis of foreign markets, defeat, mainly due to the lack of relevant assets and experience. Therefore, one of the main reasons for the increase in the number of merger transactions is the desire to be competitive and to appear on the international market. It is competition that forces companies to use existing resources more efficiently, reduce costs, and seek new investment opportunities, as a result of which former competitors, by applying a merger strategy, turn into partners.

The result of consolidation are large and powerful companies that can actively act and compete with international competitors. The merger of enterprises in order to achieve international competitiveness is especially relevant for Ukraine, as our state seeks to take a steady niche in the global economy, to ensure stable economic growth and to confirm the status of a market economy country. Despite the fact that Ukraine has a high level of natural and manpower, it is characterized by low competitiveness, not least because of the inefficient use of its own capabilities. 

The main factors that ensure the success of Ukrainian enterprises in the international market is the growth of their market value and gaining competitive advantages, which can be achieved by successful merger with another enterprise.

References:

1. Almeida, R., and P. Carneiro, 2009. “Enforcement of Labor Regulation and Firm Size.” Journal of Comparative Economics 37 (1): 28–46.

2. Amin, M. 2009. “Labor Regulation and Employment. ” Journal of Comparative Economics 37 (1): 47–61.

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Scientific supervisor: Denisenko Nikolay Pavlovich, Doctor of Economics, professor, Kyiv National University of Technology and Design

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