Corporate Globalization through Mergers and Acquisitions

K.V. Nagarjan is an assistant professor of Commerce and Administration
at Laurentian University.

This edited volume of research conference papers commissioned by
Investment Canada purports to understand the issues surrounding
cross-border mergers and acquisitions (M & As). There are seven papers
sandwiched between the editor’s introduction and the rapporteur’s
commentary. As in most conference volumes, the only common thread that
brings these papers together is the topic. The various authors provide a
highly specialized look at a chosen aspect of cross-border M & As.
Moreover, there is surprisingly little acknowledgment of the
controversial nature of the topic. In his introduction, Waverman raises
a number of relevant questions, but even these are not all taken up in
the papers. In the rapporteur’s commentary, Safarian provides a
thoughtful discussion of policy issues, but they are not directly linked
to the papers presented here. Thus, lacking in integration, the papers
in this volume are essentially stand-alone pieces. As such, they do
report significant new findings on the topic in the Canadian context.

The first two chapters are mostly factual. In Chapter 1, Khemani
discusses recent trends in M & As in Canada and abroad. Chapter 2
presents a picture of Canadian acquisitions abroad and also reports the
findings of a survey of Canadian companies with acquisitions abroad.
These two chapters, while useful, are marred by woefully inadequate
data.

The next four papers provide as much empirical analysis as the data
would allow. In Chapter 3, Rugman and Waverman use data on foreign
acquisition in Canada between 1974 and 1990 to discern patterns
exhibited by the United States, the European Community, and Japanese
companies. In Chapter 4, Baldwin and Caves study the effects of domestic
versus transnational M & As, while in Chapter 5, the issue of resource
re-allocation is examined in the context of hostile takeovers in Canada.
In Chapter 6, Halpern and Mintz discuss the tax aspect of cross-border M
& As between Canada and the United States. The appendix on salient tax
laws in summary form will prove useful to specialists in the field. The
last paper, a lawyer’s brief, argues against state intervention in M &
As activity.

A lesson that emerges from reading this book is that Investment Canada
ought to invest resources in developing a database on M & As so that the
controversial issues surrounding the topic can be more seriously
addressed than was possible here.