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According to this theory, the only rationale that should be utilized by enterprises when venturing into foreign companies should be the maximization of shareholder wealth. As such, the decision-making process must be in line with the shareholder motive (Bengel, et al., 2016). Efficiency gains are deemed to emanate from a series of sources such as Intel technology transfer as well as the economies of using specific assets of the business establishment (Oehlen, 2010). Principal-agent theoryThis is known as the agency theory and revolves around the creation of a contract in which one or more persons engage another individual for the purpose of performing specific services on their behalf (Ager, 2012). Through the process of deregulation, it is believed that the business organizations are in a position to reap extensively from their operations. One common feature of such establishments is the small percentage of ownership by the managers of the organizations involved in the mergers and acquisition transactions (Oehlen, 2010).Germany is regarded as one of the greatest investment destinations across the world. It features prominently among the most preferred investment hubs as a result of various reasons (Meglio & Risberg, 2010). The nature of foreign investment is visible across all sectors of the economy from the automotive industries to the food processing sectors of the economy (Aguilera, Dencker& Yalabik, 2008). The mergers and acquisitions in Germany have proven to be highly profitable and as such investors from across the globe have made concerted efforts to ensure that they venture into the market.
50The investment conditions of the country are excellent and highly attractive (Bengel, et al., 2016). Experts argue that there are areas of the economy that are yet to be fully exploited despite the increase investments being made into the country by both domestic and foreign investors. In some sectors, the German economy is regarded as the driving force of the European economy due to its open and transparent economic policies (Meglio & Risberg, 2010). This is evidenced by the fact that both the foreign and German firms are offered the same funding and expansion opportunities (Aguilera, Dencker & Yalabik, 2008).To promote Germany as an investment hub, the government of the day created an agency to market the country. Germany Trade and Invest (GTAI) is the body tasked by the federal Republicof Germany to provide all forms of support to the foreign investors in the country. The agency is required to work in conjunction with other entities such as chambers of industry and Commerce (IHK) and the bilateral chamber of Commerce (AHK) in promoting the business environment that is accorded by the regulatory authority in Germany. Such arrangements have been developedto fast-track the entry of foreign firms into the country and the subsequent initiation of the business process (Aguilera, Dencker & Yalabik, 2008). The guides provided by the agencies prepare the investors for any eventualities that may arise in the course of setting base in a foreignnation. The information provided by GTAI covers a broad area of operations as well as other