Corporate Strategy, Finance, Other Engineering

Assignment Help:
Corporate Strategy

Strategy

In our earlier discussion, we made distinctions between merger and acquisition or takeover. However, they generally involve similar analyses and evaluations. A merger or acquisition might be considered successful if it increases the shareholder value. Though it is quite difficult to say how the firm would have performed without merger or acquisition, but the post-merger poor performance would be attributed as a failure of merger or acquisition. What are the chances that mergers or acquisitions would succeed? Empirical evidence shows that there is more than fifty per cent chance that they would succeed.

There are several reasons responsible for the failure of a merger or acquisition. They include:

1. Excessive premium: - an acquirer may pay high premium of acquiring its target company. The value paid may far exceed the benefits. This happens when acquirer becomes to eager to acquire the target for prestige or increasing the size of its empire.

2. Faulty evaluation: - at times acquirers to not carry out the detailed diligence of the target company. They make a wrong assessment of the benefits from the acquisition and land up paying a higher price.

3. Lack of research: - acquisition requires gathering a lot of data and information and analyzing it. It requires extensive research. A shoddily carried out research about the acquisition cause the destruction of the acquirer’s wealth.

4. Failure to manager post- merger integration: - many times acquirers are unable to integrate the acquired companies in their businesses. They overlook the organizational and cultural issues. They do not have adequate understanding of the culture of the acquired companies which creates problem of integration and synergy.

Related Discussions:- Corporate Strategy, Finance

How do comets get their tails, How do comets get their tails? - Most comet...

How do comets get their tails? - Most comets stay frozen in the outer solar system. Only a few enter the inner solar system where they can grow tails. - When a comet nears the sun

Invalidation of certificate of airworthiness, INVALIDATION OF CERTIFICATE O...

INVALIDATION OF CERTIFICATE OF AIRWORTHINESS Listed below are the four major reasons why a Certificate of Airworthiness could become invalid. There may be other specific reason

Slip and slip plane, Q. What is slip? What is slip plane? What are principa...

Q. What is slip? What is slip plane? What are principal if slip planes and slip direction for BCC, FCC and HCP crystal? Ans. X-ray diffraction studies show that the crystalli

The ideal operational amplifier, THE IDEAL OPERATIONAL AMPLIFIER Althou...

THE IDEAL OPERATIONAL AMPLIFIER Although the characteristics of an ideal operational amplifier are unattainable, modern integrated circuit types can provide an extremely close

Inspecting a sprinkler systems, Inspecting a Sprinkler Systems: When i...

Inspecting a Sprinkler Systems: When inspecting a building that has sprinklers fitted it is not easy to check that the correct water pressure and flow rate can be achieved by

Importance of capital budgeting decision, The study is conducted to know th...

The study is conducted to know the importance of capital budgeting decision and the techniques to evaluate the investment projects. There are a variety of discounted and non-disco

Cro, types of blocking osicillators

types of blocking osicillators

Diffuser action-aircraft maintance, Diffuser action: The flare, which i...

Diffuser action: The flare, which increases the area of the duct, is known as a diffuser and its shape determines the rate of compression and the amount by which the air is com

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd