Abstract ▼ AI-Helper

Whereas M&A is being recognized as one of the most important growth strategies of the company in the developed countries such as U.S. and western European countries, it has been relatively underestimated and disregarded and even blamed sometimes because of the Korea's unique situations. However this...

Whereas M&A is being recognized as one of the most important growth strategies of the company in the developed countries such as U.S. and western European countries, it has been relatively underestimated and disregarded and even blamed sometimes because of the Korea's unique situations. However this is being changed recently in several reasons. For example, the less opportunities to internal growth due to the maturing Korean economy made the companies to pay more attention to external growth through M&A than before and First, the structure of strategic alliance is to be determined with consideration** M&A is also being recognized as the alternative against the globalized competition by the opening of Korean economy. With these changes, M&A has increased to some extent in 90's and the hostile M&A is also gradually increasing, following the first hostile M&A by Hansol Paper Company in late 1994. However most of the study on M&A so far has focused on the financial issues and laws and regulations on M&A in Korea, namely few study has been done on M&A in the position of each company who has plans to do M&A. Therefore this study focused on company-level strategy who is going to merge and/or acquire other companies and also is limited to the hostile M&A, focusing on the procedures of the hostile M&A. Through the case studies in Korea, the findings of this study can be summarized as follows. First, in comparison with protecting company of the target company, the company who is trying to do the hostile takeover should have the superior position in terms of the power such as company size and cash flow and also do the stock purchase as much as possible prior to the tender offer. Second, the attacking company should estimate the strength of the protection of the protecting company in advance. This would be possible by evaluating the target company itself in terms of profit an growth and its position on whole businesses of protecting company. Third, the attacking company should evaluate the potential impact from the external environment such as public opinion and government response and find a way to respond and take advantage toward the success of M&A. Fourth, the attacking company should be ready to enroll the additional strategies in response to the protecting strategy of the protecting company. Besides, the attacking company should do the extensive review on the legal issues and take advantage of the conflicts on governance between the major shareholders, if any.

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