4.2.4 Reasons for Global Mergers or Joint Ventures

• Global mergers and joint ventures are strategic alliances between businesses operating in different countries
• In a global merger, two or more businesses from different countries combine to form a single, unified entity.
• In a global joint venture, businesses from different countries collaborate on a specific project, sharing risks, costs, and profits
• Match the feature with the correct strategy:

  Complete unification ↔️ Global Merger

  Collaboration while maintaining separate entities ↔️ Global Joint Venture
• Market access is one of the benefits of global mergers and joint ventures.
• In a global merger, the businesses involved have combined control.
• Global joint ventures are typically time-limited in duration.
• What type of liability do global mergers involve?

  Joint and several liability
• One reason for global mergers is to expand into new geographical regions
• Risk mitigation is a key reason for global mergers.
• Match the reason with its description:

  Market Access ↔️ Expanding into new geographical regions

  Resource Sharing ↔️ Combining financial, technological, and human resources

  Risk Mitigation ↔️ Sharing costs and uncertainties

  Synergies ↔️ Creating competitive advantages
• What type of control do global mergers result in?

  Combined control
• A US-based tech firm might merge with a European firm to leverage the European firm's technological expertise
• Global mergers involve joint and several liability.
• A global merger combines two or more businesses into a single, unified entity
• Match the feature with the correct strategy:

  Collaboration while maintaining separate entities ↔️ Global Joint Venture

  Complete unification ↔️ Global Merger
• Reasons for forming global joint ventures

  1️⃣ Market Access

  2️⃣ Resource Sharing

  3️⃣ Risk Mitigation

  4️⃣ Technology Acquisition

  5️⃣ Regulatory Compliance
• Global joint ventures share costs and uncertainties to mitigate risk