In a merger, two companies come together and integrate their distribution lines, brands, work forces, management teams, strategies and cultures. In a cross-border merger, however, the merging companies must also integrate the legal system of their countries of origin. Specifically, they must unify accounting rules, standards of protection for investors, legal status of assets in case of default and, more generally, the corporate governance provisions of the merged company. Given that corporate governance rules differ between countries, the questions that arise are related to the process of the integration of the legal systems and the value implications to the various stakeholders.
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