Mergers and Acquisitions

It is believed that 2013 will bring around a come back in merger and acquisition activity in world markets. In the last month alone there have been three major deals announced worth $75 billion. First there was the purchase of Heinz by Warren Buffett's Berkshire Hathaway and 3G Capital (private equity firm) for $28 billion. Second, was management buyout of Dell by its original founder for $24 billion and finally, Liberty Global acquired Virgin Media for $23 billion.
There has also been a significant merger in the last month or so of 2 major US airlines (US Airways and American Airlines) which has been greatly anticipated. Recent economic and market conditions have led companies to behave far more cautiously as the risk on major deals like these has been greatly increased. There hasn't been this level of activity since the early 2000's and it may be a taste of things to come as the market is kick-started into more headline grabbing deals such as the ones already mentioned.
This was due in part to the failure and scandals of some huge companies such as Enron that severely reduced  confidence in the markets for mergers and acquisitions and created a great deal of mistrust the world over.
In the US, the recent survival after the fiscal cliff that was looking likely unless serious steps were taken to reduce the deficit and rescue the economy, has made more executives bolder to make large scale deals.
With the economic crisis many companies were seeking to survive rather than pursue growth objectives in what was a very trying period for all global companies. Focus has been more on the core business activities within a business and most companies have far less spare cash lying around than usual, effectively reducing the incentives for any M & A activity further.
Mergers and acquisitions of the size mentioned above also lead to issues involving all stakeholders, not just the shareholders. First of all, the employees of the firm being taken over will be put at risk of losing their jobs, particularly senior management members. The employees who are working closer to the frontline of the business are more likely to be kept on as they have an intimate knowledge of the work required on a day to day basis. In many cases firms are taken over because they have been weakened by poor management and made more susceptible to take overs. If this is the case then top managers are more likely to be fired and replaced by personnel that have been approved by the incoming firm. In the Heinz case Unite, representing the workers at Heinz, has already called for a meeting with the new owners to discuss the consequences of the take over on the current employees. It is likely that many top managers will lose their jobs.
A lot of the other stakeholders relationships with the company may change depending on the management approach and strategy of the firm taking over. For suppliers it may depend on whether the company is working within the same industry as the target company or not, as they may wish to change suppliers to someone who they already have a strong working relationship with. With customers the bidding firm may use different distribution channels in use.
The US airlines merger will create the biggest airline in the world and while this will have been at the fore in the minds of the those organizing the merger, they will also have seen the opportunities for vertical integration and creating synergies between the two companies and hopefully getting the chance to compare and share their respective strategic capabilities. This merger in particular will create a very large amount of market power and dominance in the US air travel industry.