Essay --

1. IntroductionAs the world gets more world-wide Companies do their best to raise their profits and survive in the controversy. Companies whitethorn have to grow to survive, and one of the best ways to grow is by merging with another company. However, many merges may disbalance the development of market and break up the balance of current market structure. Perfect example is the Daimler and Chrysler spinal fusion it is such(prenominal) poweful global corporation that has its activities all around the world. It apprise use its warm position to influence the decisions of a government. If a government disagrees with the proposals, the corporation can easily move its bussines to another country this will lead to higher(prenominal) unemployment in the country so the government can not forego this and is forced to make a trade-off. Nowdays some corporations have bigger powers than some governments and therefore it is harder to resist the influence of the corporations. Mergers also lead to a drop-off in competition in a market, this means higher prices and slight choises for consumers. The European Union is trying to prevent that companies become too powerfull and that is wherefore firms who seek to raise their profits through merger, must attain European commissions (EC) approval. In this paper I will focus on the Volvo/Scania merger case. Firstly I will explain what is merger, the benefits of firms to conduct merger and the way out of merger to market. Secondly I will briefly describe the ii companies which are involved in the Volvo/Scania merger. Finally, I will explain wherefore did the EC blocked this merger. 2. What is mergerMerger is a process when at least dickens companies combine to form one single company.In general, there are three types of mergers, Horizontal Mergers, if both f... ...cks, buses and engines businesses. After marketing its car division Volvo had nearly no market share, to become large again Volvo decided to buy shares o f his largest competitor Scania.(Case No COMP/M.1672 Volvo/Scania)The merge in the midst of these two companies would cause a large decrease in competition on the Swedish market for trucks. Volvo wanted to grow to achieve the economies of weighing machine to compete in the global markets, but Volvo was prevented from doing so because the merger would give rise them too large market share in Nordic market.6. final resultThe EC has blocked the proposed merger of Volvo and Scania because of the competition concerns. The main reason was that these two companies, which both make trucks and buses were the two largest competitors in most of their European markets, it would create significant barriers to entry the market by other companies.