Transaction Cost Approach in Mergers and Acquisition Process

Transferring the property rights between buyer and seller corporate, Mergers and Acquisitions (M&A) is a set of transaction, whereas both sides have to pay Transaction Costs (TCs). This paper aimed to build a process model for transaction and develop a measurement in approach of transaction costs, by calculating the TCs paid by one side of the M&A, for the process control. Also, this paper discusses some key factors which have influence to the transaction cost in M&A process, and their interactions. This paper also propose that TCs should be an important measure not for analysing the scale of firm, but for engineering effective procedure and mechanism.