The great potential on the Brazilian market : A study of different types of acquisition strategies on the Brazilian market
Abstract: Background: Emerging economies is more fragile for global actions than developed markets, and they struggle to keep the economic growth consistent. Brazil, as an emerging economy, has one of the higher growth in the world, but the country has had some difficulties during the last years and foreign direct investments have decreased. Most foreign direct investments activities tend to go north-to-north, and the most common investment strategy is acquisition and the success is related to the type of activity and industry. Purpose: The purpose of this thesis is to investigate what type of cross-border acquisitions companies choose to be involved in and which financial factors have the greatest impact, when entering the Brazilian market. Theory: The theoretical framework consists of theories related to acquisition strategies to answer formulated purpose. Following theories have been used as an analytical tool in the thesis: merger and acquisition waves, horisontal, vertical and conglomerate strategies and information asymmetry. Method: This study is based on a mixed method design with inductive and deductive approach. Statistical data have been gathered together with four semistructured interviews to gain data about ingoing acquisitions in Brazil. The statistical data have been gathered from the database Zephyr. Conclusion: To summarize the conclusions, ingoing cross-border acquisitions in Brazil follow a wave-like pattern that is mostly depending on horisontal acquisitions, were the financial factors that have the greatest impact is information, taxation, labor and laws.
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