"Financial Synergies and the Optimal Scope of the Firm: Implications for Mergers, Spinoffs, and Structured Finance". Journal of Finance 62 (2007): 765-807.
Rules for mergers differ considerably between countries.
Brewers' big taste for mergers.
The scope for underwriting, trading and advising on domestic and foreign mergers is growing: analysts at Merrill Lynch think investment banking, trading and advisory fees from mainland China will reach $12 billion by 2010.
Even if commissioners could use competition as a means of controlling providers, long term competition involving corporate providers appears, on German experience, to promote market concentration (mergers) on the provider side, weakening commissioners' scope for harnessing provider competition as a medium of control.
As in any merger between similar firms, there will be scope for cutting overlapping costs.
The scope for underwriting and trading Chinese equities and bonds and advising on domestic flotations and mergers (see article) could be big with fees reaching $12 billion by 2010.
This sounds optimistic, given the limited scope for the two banks to cut combined costs, usually a vital part of successful bank mergers.
But as a result, the scope for cost savings will be less, perhaps only half that achieved in a typical bank merger, so Crédit Agricole will not be able to offer a huge premium, analysts said.
Usinor has held talks with ThyssenKrupp, to no avail, although there may be scope for further talks now that the German company has separated out its steel-making arm.But the merger route is also fraught with dangers.
