The Post-Merger Performance of Corporate Takeovers

The Post-Merger Performance of Corporate Takeovers
Title The Post-Merger Performance of Corporate Takeovers PDF eBook
Author Sherry L. Jarrell
Publisher
Pages
Release 1998
Genre
ISBN

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Event studies on announcement-period stock returns have found that takeovers are expected to improve firm performance, yet the dominant finding in the existing literature on post-takeover long-term performance is that mergers destroy corporate value. This paper examines this apparent contradiction by developing a new benchmark methodology which is based on forecasts of performance and a control portfolio matched to the event firms on the basis of expected future performance and other exogenous variables. This benchmark captures what the performance of the bidder and target firms would have been had the merger not occurred, and controls for many of the inherent problems due to endogeneity (of the decision to merge) found with other approaches taken in the literature. I find that the long- term post-takeover performance of the merged firm is better than it would have been without the merger. The method is verified by examining the performance of a portfolio of canceled takeovers, where no effect is found.

The impact of cultural differences on the post-merger performance in international acquisitions

The impact of cultural differences on the post-merger performance in international acquisitions
Title The impact of cultural differences on the post-merger performance in international acquisitions PDF eBook
Author Ricardo Escoda
Publisher GRIN Verlag
Pages 29
Release 2017-09-05
Genre Business & Economics
ISBN 3668517746

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Seminar paper from the year 2017 in the subject Business economics - Miscellaneous, grade: 1,7, University of Augsburg, language: English, abstract: As the number of international mergers and acquisitions (M&As) increased formidable during the last decades, it is a highly discussed phenomenon, which is becoming more and more important (Erel et al., 2012). Nearly 30 years ago, in 1987, there have been merely 5.000 M&As worldwide, whereas in 2016 already 50.000 M&As were concluded and latest stats even predict increasing numbers of M&As. M&A experience might both harm and help post-merger performance in international acquisitions. As stated by Schoenberg (2000) national cultural differences mainly present a strong challenge for cross-border acquisitions. Since the initial financial expectations are met simply by one half of all M&As, cultural differences might be at fault for this high failure rate (Zollo and Meier, 2008). Given that cross-border M&As consolidate two or more different cultures, it has to be taken into consideration that incidents such as differing legislations, currencies, languages and cultural norms do play an essential role. As a result of those distinctions, costs to the integration process might occur and the capability of firms to achieve synergies might be subverted. Thereby, the expected economic advantages of the merger or acquisition will be affected, too. Key factors like the integration of the participating companies in each other and enormous adaptation operations are irrecoverable to accomplish synergies and advantages of M&As. The hypothesis whether national cultural differences between acquirers and targets are likely to undermine post-merger performance has been researched myriad. An appropriate classification reclines in whether cultural differences matter, when they matter, under what conditions and in which way they do. The elaboration of this paper is based on the theory of Hofstede (1980), who was one of the first to explicitly address the impact of culture on the integration process of M&As by explaining cultural differences might generate misunderstandings and conflicts between the two merging organisations. Hence the aim of our analysis is to dissect the impact of cultural differences on the post-merger performance in international acquisitions by focussing on two out of four dimensions of Hofstede (1980) by means of the works of Ahern et al. (2009) and Huang et al. (2017).

Achieving Post-Merger Success

Achieving Post-Merger Success
Title Achieving Post-Merger Success PDF eBook
Author J. Robert Carleton
Publisher John Wiley & Sons
Pages 233
Release 2004-07-16
Genre Business & Economics
ISBN 0787972916

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“The failure rate of mergers and acquisitions is unreasonable, unacceptable, and unnecessary,” say Claude S. Lineberry and J. Robert Carleton in this much-needed resource, which outlines their unique, proven, and practical process for increasing the success of mergers and acquisitions. Written for all those with a vested interest in the success of the deal—board of directors, executives, managers, employees, and shareholders—and based on years of research and real-world experience, Achieving Post-Merger Success is a down-to-earth guide that gives stakeholders the tools they need to Profile and assess corporate cultures Identify potential or actual culture clash barriers to a merger or acquisition Determine what to do to avoid, minimize, and resolve culture clash Plan for efficient and effective post-merger cultural integration of the two organizations

Mergers

Mergers
Title Mergers PDF eBook
Author D. Fubini
Publisher Springer
Pages 226
Release 2016-01-12
Genre Business & Economics
ISBN 0230800750

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Drawing on their own extensive integration experience, the systematic analysis of 167 mergers, and cutting edge academic research, the authors of this book identify the common leadership challenges to be tackled for the achievement of what we call 'corporate health', the most thorough and sustainable test of merger success.

Mergers and Acquisitions: Performance consequences

Mergers and Acquisitions: Performance consequences
Title Mergers and Acquisitions: Performance consequences PDF eBook
Author Simon Peck
Publisher Taylor & Francis
Pages 494
Release 2002
Genre Business & Economics
ISBN 9780415226271

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This set includes articles from the four main fields which have influenced the study of Mergers and Acquisitions: Economics, Finance, Strategic Management and Human Resource Management. Featuring the key papers by individuals who shaped the field, the collection presents these formative pieces in thematically grouped sections, including coverage of: * Perspectives on the modern business corporation and the role of mergers and acquisitions: historical, financial, strategic and management * Causes of mergers and acquisitions activity * Performance impact of mergers and acquisitions activity * Public policy and the corporation The set features a comprehensive index and original introductory material.

The Handbook of Mergers and Acquisitions

The Handbook of Mergers and Acquisitions
Title The Handbook of Mergers and Acquisitions PDF eBook
Author David Faulkner
Publisher OUP Oxford
Pages 774
Release 2012-06-07
Genre Business & Economics
ISBN 0191628042

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With its inception at the end of the nineteenth century as a means of consolidation and reorganization, mergers and acquisitions (M&A) have since become quasi-institutionalized as one of the primary strategic options for organizations, as they seek to secure their position in an ever more competitive and globalizing market place. Despite the optimism surrounding M&A as strategic moves, research on post-merger company performance suggests that most firms engaging in M&A activity do not achieve the sought-after performance targets, either immediately or in the years following the deal. What is it that drives M&A activity when research results do not support the performance expectations of these undertakings? Alternatively, have M&A scholars got it all wrong in the way that M&A performance is measured? Is the topic too complex, enduring, and multifaceted to study? The Handbook argues that the field of M&A is in need of a re-rooting: past research needs to be critically reviewed, and fundamental assumptions revisited. A key issue preventing efforts in the practice and study of M&A from achieving dynamic syntheses has been the disciplinary gulf separating strategy, finance, and human relations schools. The Handbook aims to bridge the hitherto separate disciplines engaged in the study and practice of M&A to provide more meaningful results. Toward this end, the Handbook brings together a set of prominent and emerging scholars and practitioners engaged in the study of M&A to provide thought-provoking, state of the art overviews of M&A through four specific 'lenses' - strategic, financial, socio-cultural, and sectorial approaches. By summarizing key findings in current research and exploring ways in which the differing approaches could and should be 'synthesized', it aims to highlight the key issues facing M&A practitioners and academics at the dawn of the third millennium.

Public Policy Toward Corporate Takeovers

Public Policy Toward Corporate Takeovers
Title Public Policy Toward Corporate Takeovers PDF eBook
Author Murray L. Weidenbaum
Publisher Transaction Publishers
Pages 200
Release
Genre Political Science
ISBN 9781412832458

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This volume examines critical issues in the debate over the effects' of the current wave of corporate takeovers. Media accounts are often sensational, but proposed public policy remedies need to be evaluated on the basis of more than simple rhetoric. The studies contained in this collection provide solid economic grounding for the debate. Public Policy Toward Corporate Takeovers is the result of extensive research sponsored by the Center for the Study of American Business and directed by Murray Weidenbaum; it examines key aspects of takeovers: the evolving regulatory role of the Antitrust Division, state versus federal authority over offensive and defensive takeover maneuvers, whether leveraged buyouts improve the firm's economic performance, and the validity of assertions about "entrenched" managements. The book also includes the views of the most publicized corporate raider, T. Boone Pickens. Balancing Pickens' highly favorable view of the value of hostile takeovers as a disciplining factor for subpar management performance is a chapter by David Ravenscraft of the Federal Trade Commission, who takes a long-term viewpoint and argues that the popular belief that takeovers create substantial efficiencies has not been borne out by the record. The overall findings do not fully support either side of the takeover controversy. The book presents both legal and economic perspectives, and suggests strategies for government policymakers as well as leaders of private enterprise.