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The details on the growth of European private equity market with 25% rise in mergers and acquisitions of firms of United States are examined.

Despite the fact that the number of completed deals dropped for the fifth year in a row, the French buyout market rocketed in value last year by more than 100%. [...]

Monthly Sector Analysis Seller -- activity Bidder -- activity Price Date ($M) 10: MINING 1041: Gold ores Anglovaal Mining (34.9) Anglo American PLC 138.03 12-Mar-02 (SA) -- Gold and chromite [...]

AS THE FAMILIAR TELEVISION AD GOES: 'WHY DON'T WE MERGE? I'm sure you'll love working for me.' Despite this cautionary note, one need only peruse the daily financial pages to [...]

The value of stock gains of corporate takeover targets in the United Kingdom is examined. Potential target/bidder synergy is the main reason for shareholder gains.

The relationship between stock and cash acquisitions on the performance of a business after the merger is discussed in detail. Cash acquisitions seem to be better in this regard.

A study on the effect of international differences in goodwill accounting methods and tax rules and the Tax Reform Act of 1986 on offer premiums in foreign and domestic acquisitions of U.S. target companies from 1982-89 was made. The study shows that the act did not affect domestic offer premiums, though premiums for both groups as well as foreign acquisitions increased after it. The study shows no indication of a relation between offer premiums and accounting standards, but it does seem to affect company acquisition choice.

The postal services and telecommunications sector was among the top UK acquisitions of European companies during 1996. The acquisition of a 25% stake in France's Cegatel by British Telecommunications PLC for 1.1 billion pounds sterling was among the largest. The business services sector was the most active in 1996, with 48 transactions in total, followed by wholesale distribution. One of the leading acquirers during the year was Unilever, with four deals in the food and drink sector. A sector-by-sector table of acquisition activity during 1996 is presented.

Transaction-specific data on foreign acquisitions of US companies over the period 1975-89 are used to examine the link between the value of the dollar, cross-border acquisition flows and takeover premia. The study's findings support the results of earlier works that the depreciation of the US currency tends to increase both foreign acquisitions into the US and foreign takeover premia for US-based targets. However, compared to previous research, the present study provides deeper insights into the nature of the exchange rate relationship. For instance, it demonstrates that the inclusion of a proxy for relative corporate wealth in foreign direct investment (FDI) tests affects test results. No exchange rate elasticity is observed in relative FDI flows when a wealth proxy is included.

Many companies are succumbing to demergers, including BAT Industries, a tobacco and financial services group with the demerger of its catalogue retailing business, Argos. Racal Electronics demerged its telecoms subsidiary and ICI completed its restructuring with the demerger of its biosciences business, producing Zeneca. Demergers are often undertaken to enhance shareholder value, although if a company's risk profile alters as a result, its cost of equity will rise.

The merger of one company into another after the parent of the first company has acquired the second should result in no gain or loss for tax purposes under IRC section 368. As long as the transactions between the three companies could be accomplished through other means and the corporate characteristics of all three remain intact, the move should be treated as a qualified stock purchase for tax purposes. The IRS should issue a revenue ruling to clarify these and other section 368 issues.

Investment banks and financial centres are eager to loan funds for the highly profitable mergers and acquisitions of United States companies. Transactions rose 31% to $117 billion in 1st half 1994 from $88.7 billion in 1st half 1993, with acquisitions increasing 18%. The growth in activity is due to cost reductions and industry consolidation, with the merger and acquisition market benefitting from better bank liquidity from the high-yield and private equity fund markets. The merger and acquisition market is perceived to offer good revenue for the banks and it is thus becoming increasingly easier for acquirors to obtain funds.

A survey of 86 German and American firms shows that there are four types of companies with different motives and strategies for acquisition. These are the market-oriented entrepreneurs, short-term profit-seekers, technological acquirers and preemptive market protectors. The American companies are generally guided by financial reasons, while the German firms follow proactive marketing objectives. Results also show that technological succes is restrained by differences in culture, technical philosophy and structure of production. However, these can be overcome through effective management.

The importance of information technology (IT) in the acquisitions process is underscored. In the 1990s, corporate acquisitions and mergers are increasingly becoming more complex, due to challenges posed by globalization, local competition, short product life-cycles, rapid innovation, environmental considerations and public regulations. Studies have indicated that while gains from acquisitions accrue to shareholders of the acquired firms, the benefits to acquiring partners are not as clear-cut and the above factors contribute to inevitable difficulties. Because IT is essential not only in administrative functions but also on operational procedures, the evaluation of a potential acquisition's IT capabilities is essential in order to identify its contribution in terms of systems and information, its corresponding value in terms of negotiation price and the difficulties involved in integrating the two systems.

Long-term strategy, not the imminent debut of EC 92, leads U.S. industry to Europe's $4.2 trillion market. Perplexed by the seeming dearth of U.S. firms clamoring for places inside Europe's [...]

Material Research Corp (MRC), a high technology manufacturer of sputtering and etching machines for semiconductor wafers, accumulated high levels of debt that the firm could not cope with. To stay in business, the firm was sold to Sony Corp in August 1989, an arrangement which has generated positive results. Sony acquired MRC because it was attracted to MRC's people and its technology. Since then, MRC has flourished because Sony invested in research and development, in personnel, and in plant capacity. Sony has also focused on long-term goals instead of demanding that MRC generate immediate profits.