Cross-border mergers are deals made between abroad companies and firms based in the target country of investment (Billingham, 2018) . Various factors should be considered during cross border mergers. For these mergers to be of any benefit to the companies involved incentives and benefits must be involved. Both parties must gain adequately from the deal. Most domestic firms exaggerate their abilities in order to attract deals on these close border mergers and acquisitions, hence foreign firms have to be very keen while selecting the companies that they choose to merge with. Many foreign firms opt to take the advice of management consultancies and investment banks.
Various risks are associated with border merger and acquisition deals. These range from political, economic, social and general risks. The foreign firms do an analysis of the potential partners and the countries they are located in and do a risk matrix with all the prior mentioned elements. They then use the score obtained to determine whether the firm would form an appropriate partner. For a cross border merger and acquisition deal to fall through it needs political support and regulatory approvals (Mulkeen, 2015) . A culture audit would be essential to improve cultural sensitivity and determine challenges, benefits, gaps and the baseline on which the company will run on in order to have cost effective initiatives.
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Merging two companies puts the assets of the other company at the disposal of the other hence they become stronger. These mergers and acquisitions can also carry many challenges mostly arising from the coming together of two different cultures in terms of corporate and national. What usually brings these challenges is failing to form one joint culture that carry’s characteristics of both parties individual cultures (Mulkeen, 2015) . This allows the partnership to have better objectives and to realize them. The audit will be more influential if it involves the employees and creates common cultural values that were part of the separate organizations before.
References
Billingham, S. (2018). What is a Cross-Border Merger? Michelmores .
Mulkeen, D. (2015). How Culture Impacts a Cross-border M&A. Global Communication .
