Role of Merger and Acquisition

Question: Write an essay on Role of Merger and Acquisition in Singapore. Answer: Introduction The purpose of this essay paper is to excavate the biggest marketing news of 2015 in Singapore. According to the market research, it has been determined that the merger and acquisition has become one of the most significant ways to improve the condition of the company (PwC, 2016). In the competitive world of business, there are many multinational companies doing same business, merger or acquisition helps the company to reduce the number of competitors and increase the service quality. In the budget of Singapore 2010, mergers and acquisitions (MA) schemes are introduced to enhance the service quality, customer loyalty in Singapore so the organizations can able to increase the capability of the business through these two processes. The mergers and acquisitions schemes are re-introduced in 2015 and 2016 again. Main Body of Analysis: Role of Merger and Acquisition in Singapore: The value of Merger and Acquisition has doubled in 2015, from the most trusted channel of Asia, it can be understood that mergers and Acquisitions help Singapore to jump up to US$101.2 from US$50.7 billion. In a span of just 1 year, the value has doubled. It is one of the successful merging so far in the world of economy (Garg, 2013). Before going deep into the study, it is necessary to understand the role of Merger and Acquisition in the growth of the organization. Besides acquisition, mergers can be taken place in various forms such as purchasing of assets, exchange of share with assets, purchase common share and exchange share for shares (https://www.accaglobal.com, 2016). There is Merger Efficiency theory, which is depicting the role of Mergers and Acquisitions. With the help of these theories, Merger and Acquisitions can be understood. There are several theories on this like Differential Efficiency Theory Inefficient Management Theory Synergy (Channel News Asia, 2016) Pure Diversification Strategic realignment for Changing Environment and Undervaluation Among the several other theories, two leading theories are Disciplinary and Synergistic Merger Motives. Strage, (2010) stated that Disciplinary mergers theory is suggesting that MA target such managers of firms, whose motif is clearly driven by the objectives not by the profit maximization (Strage, 2010). From the market research, What-when-how.com, (2016) depicted that mergers in Singapore are introduced by some specific objectives like here managers do not only focus on profit maximization but also concentrate on the profit maximization. On the other hand, Ahmad (2015) opined that Synergistic Merger Theory is opposite, in which firm mangers are trying to achieve the performance by combining the business with target. From the above chart, the significant MA can be extracted. Impact of the takeover on the market of Singapore This takeover has significant impact on the growth of the entire nation. The positive impacts of the merger and acquisition of the companies on the shareholder are going to be depicted. Quality: Service quality of Singapore airline industry can be improved through this successful takeover. Acquisition helps to improve the service qualities well as the productivity of the organization (Reed and Lajoux, 2011). With the successful takeover, the organization can able to improve the performance of the organization. Even the governing body of Singapore is showing interest in this acquisition process. Cost: At the time of acquisition, parent company or Giant Company has to pay a sum of money and later this takeover helps to reduce the cost of the company related to service (PwC, 2016). Due to the amalgamation, the company can reduce the operational cost of the company and later this cost can be implemented in the welfare of the tourism industry. With the help of the takeover, the management of the organization can able to provide better quality service to end users in low price (McManus and Hergert, 2012). Customers: Service users are the prime stakeholder of every organization. Companies should judge the purchasing behaviour of the customers and demand of the customers. Based on the two factors, customers service can be allocated to the customers. This takeover enables the customers to avail better service in low price (Iras.gov.sg, 2016). Often it is seen that the customers are complaining about the short hauls but now with the integration of short haul situation can be resolved. They are going to get best service from that giant company. Competitors: Competitors are another significant aspect of every company. This acquisition facilitates the customers of the organization to avail better service without spending much. It is a posing threat for other airline industry of same and different countries (Scribd, 2016). The airline industry is full of competitors but due to this acquisition, at least one competitor is eliminated. Acquisition may allow the other competitors to coordinate with the price increases. Negative Impacts of this takeover Apart from the positive factors, this takeover comes with several negative aspects also. Shift of power can be the major problem in future (Maji, 2013). Small companies can able to take own decision but still the power shifts from one hand to another and this can affect the organizational structure. Organizational structure and culture can also be affected due to this. The company, which has merged needs to bring significant changes in culture and structure of the organization; otherwise, it is impossible for the organization to sustain their position (Singapore Business Review, 2016). Employees are the key stakeholder of the company and takeover can affect their performance. This increase the tendency of switching companies, management should provide them training to retain them in the organization. Shareholder is the major issue of the company, due to takeover, often it is seen that shareholder looses all their faith on the company (PwC, 2016). At the time, merging powerful companies have taken over less powerful companies so the employees or shareholder may believe that the financial position of the less powerful company is not well enough so they try to search new companies (Bessembinder and Zhang, 2014). On the other hand, acquisition may have negative impact on the service level. Acquisition can be quite confusing in terms of lost relationship with the existing valued customers, transmission of sales positions and commission rate (Garg, 2013). Recommendation From the analysis of the paper, it can be determined that the merging and acquisition has significant impact on the growth of the market as it helps to increase the growth of entire industry. Along with that the entire shareholder are benefitted due to this decision. If it judged from the marketing aspect, it has been seen that it is the best decision in the Singapore so far. This takeover helps to improve the economy of the country. Conclusion From the above discussion, it can be concluded that Mergers and Acquisitions are the major profit for every company as well as for nation. With the successful takeover of the small companies by large companies has significant impact on the growth of the Singapore Business. With this successful growth, the governing body of Singapore can able to increase their GDP (Ahmad, 2015). To run the business operations smoothly, it is necessary for the management of the organization to track the resources and activities of the organization and then apply the strategies in the organizational process (https://www.accaglobal.com, 2016). The scope of the marketing is depending on the size and large company is always at the profitable position in terms of Mergers and Acquisitions, so the marketing manger should take the decisions effectively. References Ahmad, A. (2015). Corporate Governance in Banks Undergoing Merger and Acquisition. SSRN Electronic Journal. Bessembinder, H. and Zhang, F. (2014). Overreaction to Merger and Acquisition Announcements. SSRN Electronic Journal. Channel NewsAsia. (2016). MA deals in Singapore almost double in 2015. 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