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The cause and effect relationship between certainties and uncertainties
We are witnessing a wave of mergers and acquisitions both in terms of business value and alliances concluded globally. The increasing number of mergers and acquisitions is a result of globalization that creates market opportunities, contributes to the reduction in barriers to entry into markets, facilitates networking technologies, and expedites communications restructuring. From this perspective, mergers and acquisitions are now considered corporate strategies causing global changes, influenced therewith by these changes. The combination of these factors and the global trend towards privatization have fostered and sustained the greatest economic expansion and the stock market boom. Companies recur to strategic alliances in order to secure a strategic balance in the market. Merger decisions are often influenced by the potential that is offered by synergies when a variety of skills converge to ensure: the generation of new sets of activities and that of financial economies of scale, an increase in operational efficiency through economies of scale, lower costs of capital by leveling cash flow, and a better link between investment opportunities and internal cash flows.
