Globalization has been market with corporate mergers and acquisition on the regional as well as international level. This has been one of the most significant methods of entering a new market for those enterprises who do not have the experience or the insight into the regional market. However as per the latest trends mergers and acquisitions, while still actively pursued are losing their favorability as they have moral, ethical (pricing and speculation), as well as legal issues associated with them. Moreover as per the trends it is more common to come across mergers between one of more smaller or medium sized firms than established big giant corporations
The rationale behind an acquisition relates to increasing the market share and the scale of operations in order to increase the revenue base and profitability. However aside from this the advantages of economies of scale are also experienced through acquisition while the market knowledge and expertise is also acquired. The foreign direct investment in this case is extensive for the business as it needs to over the assets as well as the goodwill and other costs of the acquisition.
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