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the issue of new stock by the acquiring firms to the shareholders of the acquired firms in return for the release of their stock. Clearly M&As involve huge stakes and they are among the most important strategic decisions companies ever take. International M&As, however, are an integral part of an even more mega process, namely globalization. They are motivated by the globalization of markets and opportunities offered by the liberalization of trade. They are also motivated by the search for new sources of innovation about ias exam and the unique competencies that sustain such innovation. At the same time, advances in communication technology ease the task of managing on a global scale the ever-larger companies that M&As help to create. Worldwide M&A activity in 1998 totaled over US $2,330 billion in terms of the stock values involved, or US $2,514 billion in transactions announced. The pace continued to increase to a record estimated at US $1,166 billion in the first quarter of 2000 alone During the 1990s, the share of cross-border M&As ran at just over one quarter of the world total, in terms of both value and the number of deals. In 1999, cross-border M&A activity grew by more than one-third, to reach a total value of $720 billion. M&As of companies with their headquarters in the same country, though normally classified as domestic, often have cross-border features when they require the integration of operations located in different countries. In 1998, the three countries with the largest selling values in cross-border M&As were the USA, the UK, and Germany the same rank order as in 1997. British companies have for many years been consistently among the most popular targets for international acquisitions. About 40 per cent of the expenditure by US companies on international acquisitions in 1998 some $50 billion went on the purchase of British firms. Preliminary United Nations figures show Britain in third place for 1999, being displaced by Sweden due partly to one-off receipts of $20 billion from the merger between Astra, the Swedish pharmaceuticals group, and the UK's Zeneca .On the purchasing side, the USA and UK together accounted for approximately one-half of the total value of all cross-border M&As in 1999, with the UK assuming the first position previously held in the about ias. UK companies had previously come second to the United States in the period since 1993. German and French companies have consistently figured among the leading acquirers, with Japanese acquirers also featuring high in the list until the financial crisis of the mid-1990s. M&As are therefore a major feature of international corporate life, and the UK is a particularly important location for them. International mergers and acquisitions are a major vehicle for foreign direct investment by companies. Most new FDI in 1998, especially between the USA and the European Union, was in the form of M&As. It is very difficult to distinguish between a merger and an acquisition in the case of mega deals. Rather than involving monetary payments, which would be virtually impossible with the largest deals because of their sheer size, there have often been exchanges of stock between the two firms.
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