Bìznes Inform (Feb 2021)
Influence of Mergers and Acquisitions Processes on the Competitiveness of the Agricultural Sector
Abstract
Mergers and Acquisitions (M&A) are widespread in the business world, being one of the means of competition. They belong to agreements between two companies that become combined in one form or another. Although mergers and acquisitions are used as synonyms, they have different meanings. When merged, two companies of the same size are combined into one new enterprise. Acquisitions are a situation in which a larger company acquires a smaller company, thereby taking over the business of the latter. M&A agreements may be friendly or hostile, depending on their approval by the board of directors (management) of the target company. The main reasons for mergers and acquisitions can be called the desire of companies to increase the growth rate, strengthen and stabilize supply chains and sales of products, diversify production, optimize the tax burden, as well as strengthen their market positions due to reputational advantages. The article analyzes the normative and legislative acts of Ukraine regulating the procedure for concluding M&A agreements, as well as displaying information about them in both the accounting and the financial statements of enterprises. Regarding the regulation of the procedure for concluding M&A agreements, there are no clear definitions of these terms. These concepts are considered only in the context of methods of formation, reorganization or liquidation of enterprises. The authors have allocated some aspects of taxation of operations on the purchase and sale of assets and shares in the implementation of M&A agreements. The relevance of the chosen topic is due to the strengthening of the tendency to the concentration of resources (land banks) by large agricultural enterprises in Ukraine. The statistics on M&A agreements in the agro-industrial sector of Ukraine for the period 2018-2020 are to testify to this tendency. Positive aspects of mergers and acquisitions for agricultural enterprises, as well as risk factors that may appear as a result of an increase in the share of foreign companies in the agro-industrial sector of Ukraine, have been allocated.
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