...With reference to your own research do you think that takeovers and mergers inevitably improve the performances of the businesses involved? Mergers and takeovers are similar corporate actions combing two previous separate firms now formed into one legal entity. A takeover revolves around gaining control of something, especially the buying out of one firm/company by another while a merger contrasts as it includes a combination of firms where there is a mutual agreement of two companies to combine and become one entity. At first glance it may be viewed that takeovers and mergers will certainly really benefit all firms and performances of business involved will improve although there are lots of considerable aspects involved in both takeovers and mergers that must be identified and may highlight that businesses will certainly benefit from takeovers and mergers. It is also important to recognise and define what is actually meant by ‘performance’ or firms. Performance or business often revolves around quantifiable terms used to assess how well a firm is achieving its objectives. Many businesses can often measure its performance in terms of obviously its revenue, market share, market capitalism (culminative value of all shares), production, demand and operating efficiency in order to get more sense of how their business is operating and whether and improvements are required but they may also measure the performance of a business in more tangible terms including its innovation, motivation...
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...‘M&As: why don’t people ever learn from the mistakes of others? by William Richards Introduction Over the years, mergers and acquisitions research has identified the importance of leadership and workplace learning as critical determinants of M&A activities and outcomes. However, surprisingly little systematic attention has been paid to conceptualising or studying the impact and effect of either leadership styles or learning on the success of M&As – either in the academic or in the practitioner literature (Cartwright and Cooper, 2001) Although scholars and practitioners recognise that acquisitions frequently fail to live up to their potential (Larsson and Finkelstein, 1999), the impact of leadership on the outcomes of the acquisition process and the learning that takes place, has not been well developed or even widely recognised. A review of scholarly and practitioner focused writing on M&As suggest that while much has been written on the actual M&A process, others have only occasionally noted the critical importance of leadership and learning in the success or failure of M&As. Even in those cases where the leadership impact has been acknowledged, past work on M&As has neither examined nor proposed any details concerning what constitutes what learning that actually takes place during M&A or how it makes a difference. A review of academic and practitioner literature on M&A reveals that discussion of the primary determinants of M&A process and outcomes rarely ever...
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...Takeovers and mergers are complex transactions where many things can go wrong and therefore affect the success or failure of the deal. Integration planning is an important part of the takeover process, although there are other potentially significant factors that affect whether a takeover is successful which also need to be considered. (knowledge/ evaluation) Integration planning refers to a process in which the buying business (the acquirer) identifies how it will run the takeover target once the transfer of ownership has been completed. Integration involves many functional challenges such as how to manage customer reaction to the takeover, handle uncertainty amongst employees and integrate potentially different computer systems. Key strategic issues also arise – for example decisions over the future of competing brands, key business locations and the senior management structure. (application) Integration planning normally takes place before the transaction is completed with the aim of ensuring that the acquirer has a clear idea of the integration issues and a realistic action plan of how these issues can be addressed. It can be seen therefore that good integration planning can reduce the risks involved. (knowledge/ analysis) One reason why integration planning is important (evaluation) in determining the success of a takeover is that the process of integration is closely tied in with the need to achieve synergies. Synergies include cost savings and additional revenues...
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...integration results in the most profitable application of a merger structure versus considering a horizontal or diversified integration approach. Hence, the topic surfaced during Satterlee’s (2018) comments relating to multinational corporations (MNC) and the three extensive types of MNCs concerning production, operations management, and functionality as the operational focus. Therefore, further research may reveal if one type of integration is more applicable when one considers a production merger or an operations style merger among the corporations considering these financial endeavors and...
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...here: Home > Economics help blog > Pros and Cons of Mergers Pros and Cons of Mergers by Tejvan Pettinger on February 22, 2012 in economics A look at the pros and cons of mergers. Are mergers in the public interest or are mergers just beneficial for top executives and shareholders? When looking at mergers it is important to look at the subject on a case by case basis as each merger has a different possible benefits and costs. These are the most likely advantages and disadvantages of a merger. Pros 1. Network Economies. In some industries, firms need to provide a national network. This means there are very significant economies of scale. A national network may imply the most efficient number of firms in the industry is one. For example, when T-Mobile merged with Orange in the UK, they justified the merger on the grounds that: “The ambition is to combine both the Orange and T-Mobile networks, cut out duplication, and create a single super-network. For customers it will mean bigger network and better coverage, while reducing the number of stations and sites – which is good for cost reduction as well as being good for the environment.” 2. Research and development. In some industries, it is important to invest in research and development to discover new products / technology. A merger enables the firm to be more profitable and have greater funds for research and development. This is important in industries such as drug research. 3. Other Economies of Scale. The main...
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...International ISSN: 2278-6236 Journal of Advanced Research in Management and Social Sciences Impact Factor: 4.400 MERGERS A N D ACQUISITIONS IN THE INDIAN BANKING SECTOR: A STUDY OF SELECTED BANKS Komal Gupta* Abstract: In the present era of global economy, Mergers most widely used business strategy restructuring greater market economies share, long term of corporate profitability, entering of scale etc. The present paper evaluates on the financial is conducted performance and Acquisitions have become the and strengthening new markets, capitalising the effects of merger and acquisitions to analyse the effectiveness on the banks. Two cases of merger and acquisitions of mergers and acquisitions have been taken randomly the study, first the merger of ICICI bank and The Bank of Rajasthan, Bank of Punjab. The results of the study indicate positive and acquisitions on the financial as sample for and second the merger of HDFC bank and Centurion of mergers on of the selected banks in India. Pre and post merger comparison on selected variables impact to achieve performance that there is a of the selected banks. Key Words: Mergers and acquisition, Banking, Financial Performance, Financial Ratios, Synergy. *Assistant Professor, Maharaja Agrasen College, Delhi University Vol. 4 | No. 3 | March 2015 www.garph.co...
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...Mergers And Acquisitions: Shareholder Wealth Effects Mergers and acquisition otherwise identified as M& A defines an aspect of corporate management strategy, as well as corporate finance that deal with the selling, the buying and dividing of the various companies. It also involves combining the various companies and similarly oriented identities which could assist a given enterprise to grow rapidly within its sector of origin, or even a new field or location even without necessarily creating some subsidiary or joint type of a venture. The actual distinction which exists between a merger and an acquisition has been seen to become increasingly blurred in several aspects. This has been seen to be significant particularly in terms some ultimate economic outcome. Acquisition normally refers to the process of significantly smaller firms by a significantly large firm. However, it is notable that in some instances, a smaller firm could acquire some management control of a significantly larger firm or even a longer established firm in an effort to retain the real name of the latter for some past acquisition entity through combined efforts. This normally results into a reverse takeover and affects all the shareholders who are involved within the two firms. According to research study done by Ang and Kohers across the US territory, a reverse merger could also affect the shareholders in significant ways. This is because the merger enables a given private company to become publicly...
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...Assignment The Role of Human Resources in Mergers & Acquisitions “In implementing an M&A, most managers and business leaders focus on the financials. But success often hinges on how you deal with people issues and cultural Integration”. Andrew F. Giffin and Jeffrey A. Schmidt 1 Successful Mergers and Acquisitions are much more than just a name change on the premises and changing company branded material and policies. Mergers and acquisitions (M&A’s) are notoriously risky, and international M&A’s are even more so. Numerous studies on M&A’s, show that success is not always guaranteed. To the contrary, the biggest percentage of (costly) M&A’s, do not achieve goals and set objectives. Mercer Human Resource Consulting, after examining the evidence, has concluded that as many as 60–70% of M&A’s fail to deliver their intended benefits. Another study by CFERF 2 claims that 75% of the deals have failed or underperformed. Although it is clear that some of these unsuccessful ventures are due to financial and market factors, the root cause of a considerable number of failures lies in disregarded HR issues and activities. Some of the main (HR- people) mistakes in mergers and acquisitions are: o HR not being involved early in the game o Lack of culture blending and misaligned values- do not underestimate cultural differences o No clarity on mission and vision o Communications, communications, communications – lack of it in the main Other research has shown that only 1/5th of international...
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...MANAGING CULTURAL INTEGRATION IN CROSS-BORDER MERGERS AND ACQUISITIONS Daniel R. Denison, Bryan Adkins and Ashley M. Guidroz ABSTRACT Cross-border M&A has become one of the leading approaches for firms to gain access to global markets. Yet there has been little progress in the research literature exploring the role that culture may play in the success of these ventures. Poor culture-fit has often been cited as one reason why M&A has not produced the outcomes organizations hoped for (Cartwright & Schoenberg, 2006). Cross-border M&A has the added challenges of having to deal with both national and organizational culture differences. In this chapter we review the literature on cultural integration in cross-border M&A and provide a framework designed to help manage the integration process throughout the M&A lifecycle. This framework presents culture assessment and integration as a crucial component to reducing poor culture-fit as a barrier to M&A success. Mergers and acquisitions (M&A) have become a central part of most corporate growth strategies, and an increasing portion of that M&A activity now spans national borders. Indeed, beyond a certain scale, one might say that all M&A is now cross-border M&A. For example, even a merger Advances in Global Leadership, Volume 6, 95–115 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2011)0000006008 95 96 DANIEL R. DENISON ET AL. between two large...
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...MANAGING CULTURAL INTEGRATION IN CROSS-BORDER MERGERS AND ACQUISITIONS Daniel R. Denison, Bryan Adkins and Ashley M. Guidroz ABSTRACT Cross-border M&A has become one of the leading approaches for firms to gain access to global markets. Yet there has been little progress in the research literature exploring the role that culture may play in the success of these ventures. Poor culture-fit has often been cited as one reason why M&A has not produced the outcomes organizations hoped for (Cartwright & Schoenberg, 2006). Cross-border M&A has the added challenges of having to deal with both national and organizational culture differences. In this chapter we review the literature on cultural integration in cross-border M&A and provide a framework designed to help manage the integration process throughout the M&A lifecycle. This framework presents culture assessment and integration as a crucial component to reducing poor culture-fit as a barrier to M&A success. Mergers and acquisitions (M&A) have become a central part of most corporate growth strategies, and an increasing portion of that M&A activity now spans national borders. Indeed, beyond a certain scale, one might say that all M&A is now cross-border M&A. For example, even a merger Advances in Global Leadership, Volume 6, 95–115 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2011)0000006008 95 96 DANIEL R. DENISON ET AL. between...
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...Mergers and acquisitions (M&A) are both aspects of strategic management, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. Methods to pursue a strategy can be divided into three categories: internal growth, external growth (mergers, acquisitions, disposals) and collaboration (alliances and partnerships). Of course, these conditions can also affect other policies, such as the consolidation of a competitive position or the establishment of an advantage through economies of scale. In this task, we will focus on mergers and acquisitions. 1) Definitions: An acquisition corresponds to the repurchase of an organization by another organization, while a merger is the decision mutually granted by organizations to share their ownership. Most of the acquisitions are friendly: both parts get on the terms of the repurchase, and the direction of the target recommends to his(her) shareholders to accept the offer. However, certain acquisitions are hostile: the buyer proposes then a price to the shareholders of the target against the advice of his managers. The choice of the shareholders is then decisive. The direction(management) of Cadbury so initially rejected the hostile offer of Kraft by looking for a more friendly...
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...|Merger and Acquisition | INDEX |S.NO |Contents |Page No. | |1 |Abstract |3 | |2 |Introduction |4 | |3 |Types of Mergers |4 | |4 |Reasons for Mergers and Acquisition |5 | |5 |Advantages of Mergers and Acquisition |7 | |6 |Failure of Mergers and Acquisition |10 | |7 | Making it Happen |13 | |8 |Conclusion |14 | |9 |Bibliography |15 | Abstract: As a corporate strategy, Mergers and Acquisition have been used to expand size and growth of business. In this report this corporate strategy is investigated...
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...| Symantec Corporation | Mergers and Acquisitions | | Chris Miller | 11/9/2011 Dan SalmApplied Microeconomic Theory | | * Introduction * This research paper attempts to give a view of the traditional theory relating to Symantec Corporation and their acquisitions and mergers in an attempt to gain market control. Mergers and acquisitions correspond to change within a business looking to gain market power. No other experience is harder to attain for a company, represents more of a challenge, or as hectic as an acquisition or merger. It is vital that the management understands the methods required to perform acquisitions and mergers and that they have a clear understanding of how the procedure works. A corporate merger is the amalgamation of two company’s liabilities and assets developing into a single business element. Acquisitions occur when a large company, typically in a monopolistically competitive market, encompasses a smaller company giving the larger company a monopolistic advantage. A merger occurs when the amalgamation of liabilities and assets is depicted to be between companies of equal market standing. Within a company merger of estimated equals, there is typically an exchange of company stocks where one business distributes new shares to the shareholders of the other company at a specified percentage. * “Those who boast of their commonsense approach to management are very probably just following the ill-formed, half-forgotten, pseudo-scientific nostrum...
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...MERGERS AND ACQUISITIONS LITERATURE REVIEW LUKE WALTON Table of Contents Abstract 3 Introduction 3 Background and motivation 3 Objective or aim of this literature review 4 Findings from current available literature 4 Issues from current research 5 Contribution to current literature and stakeholders 5 Section One 6 Motivation of M&A’s 6 Synergy 6 Agency theory 7 Hubris 7 Relationship between motives and financing 8 Section Two 9 Payment methods 9 Financing hierarchy vs. market conditions 9 Differing views on leverage 10 Valuation and the agency problem 10 Managerial ownership 11 Section Three 12 Performance of mergers and acquisitions 12 Performance indicators 12 Methodology 13 Profitability 13 Performance due to the motivation 14 Conclusion 15 Summary and findings 15 Areas of future research 17 Qualitative research in M&A’s 17 Decision making process for methods of payment 17 Unified methodology in determining M&A performance 17 References 19 Abstract Mergers and acquisitions have become a common practice for firms as a mean to expand and increase profitability. Existing evidence is still unable to strongly determine what factors make a successful M&A due to inconsistency in data and findings. This paper aims to provide an insight to the steps included in the M&A process by comparing existing literature and hopes to suggest key determinants of a successful M&A transaction. Evidence shows...
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...New Evidence and Perspective on Mergers – A One Page Summary The authors of this article have provided further evidence on the value of mergers and acquisitions by updating the database to include facts for the 1990s to empirical research. They came to a conclusion that mergers seem to create shareholder value, with most of the gains accruing to the target company. In arriving at their conclusion, they reviewed issues on why mergers occur. They reviewed reasons for merger that appear to be more relevant in certain time periods. They argue that industries tend to restructure and consolidate in concentrated periods of time, that these changes occur suddenly, and that they are hard to predict. However, they state that explaining the long-term effects of mergers, and what makes some successful and others not, is still a question that remains largely unanswered. They also identify that, although merger and acquisition activity, occurs in readily identifiable waves over time, these waves are not alike. In fact, the identity of the industries that make up each merger boom varies tremendously. After identifying why and how mergers occur, the authors go ahead to identify winners and losers in the merger game. They identify that the most statistically reliable evidence on whether mergers create value for shareholders comes from traditional short-window event studies. The authors argue that the target firms consistently have abnormal returns of 16% in the announcement period across decade...
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