M&A GOVERNMENT INCENTIVES
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Hello from Greece. One of my recent puzzles is: taking into consideration that larger companies have more chances of becoming more competitive and contribute more to a country’s GDP, can anyone mention Innovative Positive Incentives (tax related, financial, legal etc) that Governments could offer to companies, in order to boost value adding Merger & Acquisition Activity in a country?
It is tricky. While some measures can be taking by governments to incentives M&A, at the same time governments are responsible to make sure such deals will not results in anticompetitive conducts and that is why strict antitrust laws are enforced.
Many countries have tax legislation that could be seen as incentivizing M&A activity, by allowing for tax neutral or the deferral of tax liabilities, where acquisitions are funded via the issuance or transfer of shares. To promote M&A activity, tax incentives could be further expanded by also applying to cash proceeds.
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