Possibilities of Business Restructuring Under the Recession

The decrease in business activity and the fall in the production volume in the sectors of economy relying on long-term crediting is characteristic feature of the modern recessions. The pessimistic expectations of entrepreneurs concerning product demand leads to falling direct investment into business despite unlimited investment opportunities due to the developed capital markets nowadays. As a result it has created the opportunity for the development of such business restructuring types as mergers and acquisitions. Potential investors are different and their investment motivation is different, but the goal is the same—to increase the value of the business and its efficiency as a result of mergers and acquisitions. Utilizing borrowed capital for acquisitions of enterprises has many advantages. However, purchasable enterprises are exposed to several financial risk factors.