Merger and Acquisitions
Mergers and Acquisitions:
A review of phases, motives and success factors.
Contents
1. Introduction
2. Merger & Acquisition Swings and Roundabouts
3. Merger & Acquisition Phases
4. Merger & Acquisition Motives
5. Merger & Acquisition Success Factors
Introduction Merger: The combining of two or more organization into a single organization in order to gain competitive edge is called a merger. Acquisition: The complete takeover of a company by another company through purchasing of more than 50% shares of the target company is called acquisition. numerous empirical researches attempted to identify external and internal variables like previous experience in acquisition, mode of payment for acquisition, relatedness level between the companies and the acquired company that seems to greatly influence the acquisition success, a significant correlation has not been identified between them and the M & A success. M & As are a common managerial strategy whether used by firms to enter a new market, subdue rivals or acquire valued resources such as technology, location or people.
In this chapter we begin to review the literature on the topic with the objective of improving and integrat- ing our knowledge on Mergers & Acquisitions. Especially the phases, motives and success factors of Mergers & Acquisitions.
Merger & Acquisition Swings and Roundabouts?
Until now there doesn’t seem to be a concerted effort to consolidate M & A knowledge. Lubaktin and Lane (1996) found out that mergers of 1990s were not different than mergers of 1980s and 1960s. A common theme in explaining the failure for merger is over attention to financial factors at the expense of the human and organizational elements. Personal factors, particularly top management talent and the depth of the management talent needs more concentration in the pre-merger state.
Other merger failure factors involve financial, psychological, personal and
A review of phases, motives and success factors.
Contents
1. Introduction
2. Merger & Acquisition Swings and Roundabouts
3. Merger & Acquisition Phases
4. Merger & Acquisition Motives
5. Merger & Acquisition Success Factors
Introduction Merger: The combining of two or more organization into a single organization in order to gain competitive edge is called a merger. Acquisition: The complete takeover of a company by another company through purchasing of more than 50% shares of the target company is called acquisition. numerous empirical researches attempted to identify external and internal variables like previous experience in acquisition, mode of payment for acquisition, relatedness level between the companies and the acquired company that seems to greatly influence the acquisition success, a significant correlation has not been identified between them and the M & A success. M & As are a common managerial strategy whether used by firms to enter a new market, subdue rivals or acquire valued resources such as technology, location or people.
In this chapter we begin to review the literature on the topic with the objective of improving and integrat- ing our knowledge on Mergers & Acquisitions. Especially the phases, motives and success factors of Mergers & Acquisitions.
Merger & Acquisition Swings and Roundabouts?
Until now there doesn’t seem to be a concerted effort to consolidate M & A knowledge. Lubaktin and Lane (1996) found out that mergers of 1990s were not different than mergers of 1980s and 1960s. A common theme in explaining the failure for merger is over attention to financial factors at the expense of the human and organizational elements. Personal factors, particularly top management talent and the depth of the management talent needs more concentration in the pre-merger state.
Other merger failure factors involve financial, psychological, personal and
References: Enlarge the product line or complement The products or services Levinson (1970) Growth in market power Pennings et al (1994) Trautwein (1990) Increase market share Gopinath (2003) Spread the risk by investing Synergy Pennings et al (1994) Trautwein (1990)