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Languages : en
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In this thesis the performance implications for acquirers participating in an industry merger wave were studied from a short-term and long-term perspective. In line with findings from previous research, it was observed that acquisition performance tends to decrease over the course of an industry merger wave while following a U-shaped pattern, which indicates that acquisition performance is lowest at the peak of an industry merger wave but slightly improves thereafter. These findings were confirmed using both short-term abnormal returns and long-term industry-adjusted returns. Thus, with respect to the performance implications associated with the relative position of an acquisition within a wave, it appears that there exists a strong link between market expectations formed immediately after the announcement of a deal and firms' long-term stock performance, a link which has generally been debated in mergers and acquisitions research. Additionally, as in the study of McNamara, Haleblian, and Dykes (2008), potential moderating effects on acquisition performance related to industry and firm characteristics were analyzed. While not all of these moderating effects showed consistent results across all alternative performance measures, a newly introduced variable based on acquisition rhythm was identified to be significant in both the short-term and long-term models, which provided evidence that the variability in acquisition rate seems to be an influential factor for acquisition performance in the context of industry merger waves. After rerunning all models on a more recent dataset covering ten new industry merger waves between 2001 and 2012, it was found that surprisingly few of the initially identified effects could be reconfirmed.
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Languages : en
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Book Description
In this thesis the performance implications for acquirers participating in an industry merger wave were studied from a short-term and long-term perspective. In line with findings from previous research, it was observed that acquisition performance tends to decrease over the course of an industry merger wave while following a U-shaped pattern, which indicates that acquisition performance is lowest at the peak of an industry merger wave but slightly improves thereafter. These findings were confirmed using both short-term abnormal returns and long-term industry-adjusted returns. Thus, with respect to the performance implications associated with the relative position of an acquisition within a wave, it appears that there exists a strong link between market expectations formed immediately after the announcement of a deal and firms' long-term stock performance, a link which has generally been debated in mergers and acquisitions research. Additionally, as in the study of McNamara, Haleblian, and Dykes (2008), potential moderating effects on acquisition performance related to industry and firm characteristics were analyzed. While not all of these moderating effects showed consistent results across all alternative performance measures, a newly introduced variable based on acquisition rhythm was identified to be significant in both the short-term and long-term models, which provided evidence that the variability in acquisition rate seems to be an influential factor for acquisition performance in the context of industry merger waves. After rerunning all models on a more recent dataset covering ten new industry merger waves between 2001 and 2012, it was found that surprisingly few of the initially identified effects could be reconfirmed.
Author: Timo Gebken
Publisher: GRIN Verlag
ISBN: 3640264754
Category : Business & Economics
Languages : en
Pages : 166
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Doctoral Thesis / Dissertation from the year 2008 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: Summa cum Laude, European Business School - International University Schloß Reichartshausen Oestrich-Winkel, language: English, abstract: Empirical corporate finance research analyzes the link between major corporate decisions and the shareholder value development of the respective companies. Enhancing the welfare of shareholders is a fundamental and common objective of all firms and corporate managers are required to implement policies consistent with shareholder welfare. However, the financial literature shows that major corporate decisions are not associated with stock market gains to the respective companies. Especially, the mergers and acquisitions related literature shows that the returns to bidding firm shareholders are essentially zero when they pursue an acquisition. Due to these empirical results, there is an ongoing debate why so many value decreasing decisions occur and how the success of corporate actions is related to company specific internal characteristics and the firms’ external environment. Timo Gebken’s dissertation contributes to this debate. Timo links the time series behavior of industry specific M&A activity to the shareholder wealth effects of the transactions. The majority of deals within an industry occur in very short time periods, so called industry merger waves. These industry merger waves are characterized by a fast consolidation process, which drastically changes the competitive environment for all firms within the industry. Timo analyzes how and why this rapidly changing environment influences the shareholder wealth effects of M&A activity. His results show that the gains associated with transactions change dramatically during an industry merger wave. At the beginning of an industryspecific consolidation process, mergers and acquisitions are accompanied by significantly positive returns to the merging firms and by positive intra-industry effects. In contrast, at the end of an industry merger wave, the shareholder wealth effects are significantly negative. To explore the reason for these results, Timo links the gains to the merging firms to the respective intra-industry effects and to key target characteristics. He shows that targets often possess very scarce resources towards the end of an industry merger wave. The corresponding increased competition for the “last” targets leads to increasing competitive effects at the intra-industry level and to higher premiums paid by bidding firm shareholders. Due to these mechanisms, the gains associated with M&A activity decrease significantly as an industry-specific consolidation process continues.
Author: Simon Peck
Publisher: Taylor & Francis
ISBN: 9780415226257
Category : Consolidation and merger of corporations
Languages : en
Pages : 512
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Book Description
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.
Author: Malwina Woznik
Publisher: GRIN Verlag
ISBN: 3656475709
Category : Business & Economics
Languages : en
Pages : 115
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Book Description
Master's Thesis from the year 2013 in the subject Business economics - Controlling, grade: 1,3, University of Cologne (Seminar für allgemeine BWL und Controlling), language: English, abstract: “Warren Buffett swallows Heinz: Sauce for the sage” – a typical takeover announcement was published lately on 14th February 2013. Warren Buffett, a well known inves tor, acquired along with the financial investor 3G Capital the H. J. Heinz Company for $ 28 billion. This is likely to become the largest transaction in the food industry. The company's stock price rose more than 20.0 percent after the publication which is a very characteristic reaction to deal announcements. Hence, the important question is, if transactions, such as the takeover of the H. J. Heinz Company, affect the corporate performance consistently. In general, the core idea about mergers and acquisitions (M&A) is to generate additional future growth if for example organic growth is limited. If two companies merge or a target is bought by another company (the acquirer), shareholders believe in synergy effects. These are revenue enhancements, cost reductions, tax gains and reduced capital requirements leading to business growth and thus to a higher value of the new company. However, it is questionable if this theory can also be experienced in the real world. Ever since the effects of M&A have been analysed, the market of the United States (US) was used as data source. This is plausible due to the fact that the very first information was well recorded for US companies. It is remarkable that literature contributes very little research on Europe, although the number of announced European transactions is comparable to those of the US. For example, in 2007 the European deals volume overtook the one from the United States of America (USA) for the first time. Moreover, research on single European countries almost never exists or only rarely. One exception is the United Kingdom (UK) with an early takeover history beginning in the 1960s. However, European countries should be analysed separately because of its high diversity regarding the accounting framework, the corporate governance or the legal and regulation structure. For instance, Germany is characterised by conservative accounting principles and a high regulation by the banking sector. These issues may also influence the M&A decision making process.
Author: K. McCarthy
Publisher: Springer
ISBN: 1137278072
Category : Business & Economics
Languages : en
Pages : 406
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Book Description
The first volume to explore mergers and acquisitions in the 21st century. The authors systematically introduce, characterize and evaluate these mergers, and discuss the methodologies that can be employed to measure them. They also consider a number of factors relevant to the performance of mergers and acquisitions.
Author: Daniel Vogel
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study investigates whether a significant difference in abnormal returns to shareholders of acquiring companies during and between merger waves exists. The study of 292 acquirers in very large U.S. domestic public transactions between 1990 and 2000 shows that abnormal returns are significantly lower in the merger wave than in periods of low mergers and acquisitions activity. This phenomenon holds true even when NASDAQ-listed companies are excluded and subsamples by method of payment compared. Stock paid transactions clearly perform worse than transactions paid with cash or a combination of payment methods. No significant difference has been found between the post-transaction abnormal returns of single acquirers and companies that make many acquisitions. Furthermore, it can be shown that over the two years following the transaction announcement, acquiring shareholders face ever decreasing abnormal returns raising the question as to whether the stock market is capable of fully assessing the possible gains and losses from those transactions at the time of the transaction announcement. Many behavioral theories are supported by the results of this study, while the neoclassical theory fails to explain the negative cumulative average abnormal returns and reverse trends observable after the transaction announcement.
Author: David Faulkner
Publisher: OUP Oxford
ISBN: 0191628034
Category : Business & Economics
Languages : en
Pages : 784
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Book Description
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.
Author: Paul M Healy
Publisher: Legare Street Press
ISBN: 9781021498649
Category :
Languages : en
Pages : 0
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Book Description
This book examines the phenomenon of corporate mergers and the impact they have on performance. Drawing on extensive research and case studies, the authors explore the conditions under which mergers are most likely to succeed and offer guidance to managers looking to pursue a merger strategy. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.
Author: Alan J. Auerbach
Publisher: University of Chicago Press
ISBN: 0226032167
Category : Business & Economics
Languages : en
Pages : 354
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Book Description
The takeover boom that began in the mid-1980s has exhibited many phenomena not previously observed, such as hostile takeovers and takeover defenses, a widespread use of cash as a means of payment for targeted firms, and the acquisitions of companies ranking among the largest in the country. With the aim of more fully understanding the implications of such occurances, contributors to this volume consider a broad range of issues as they analyze mergers and acquisitions and study the takeoveer process itself.
Author: Richard A. D'aveni
Publisher: Simon and Schuster
ISBN: 1439122636
Category : Business & Economics
Languages : en
Pages : 350
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Book Description
General Motors and IBM have been battered to their cores. Jack Welch, the chairman of General Electric, called the frenzied competition of the 1980's "a white knuckle decade" and said the 1990s would be worse. In this pathbreaking book that will define this new age of "hypercompetition," Richard D'Aveni reveals how competitive moves and countermoves escalate with such ferocity today that the traditional sources of competitive advantage can no longer be sustained. To compete in this dynamic environment, D'Aveni argues that a company must fundamentally shift its strategic focus. He constructs a brilliant operational model that shows how firms move up "escalation ladders" as advantage is continually created, eroded, destroyed, and recreated through strategic maneuvering in four arenas of competition. Using this "Four Arena" analysis, D'Aveni explains how competitors engage in a struggle for control by seeking leadership in the arenas of "price and quality," "timing and know-how," "stronghold creation/invasion," and "deep pockets." Winners set the pace in each of these four competitive battlegrounds. Using hundreds of detailed examples from hypercompetitive industries such as computers, software, automobiles, airlines, pharmaceuticals, toys and soft drinks, D'Avenie demonstrates how hypercompetitive firms succeed in dynamic markets by disrupting the status quo and creating a continuous series of temporary advantages. They seize the initiative, D'Aveni explains, by employing a set of strategies he calls the "New 7-S's" Superior Stakeholder Satisfaction, Strategic Soothsaying, Speed, Surprise, Shifting the Rules of Competition, Signaling Strategic Intent, and Simultaneous and Sequential Thrusts. Paradoxically, firms must destroy their competitive advantages to gain advantage, D'Aveni shows. Long-term success depends not on sustaining an advantage through a static, long-term strategy, but instead on formulating a dynamic strategy for the creating, destruction, and recreation of short-term advantages. America must embrace the new reality of hypercompetition, D'Aveni concludes in a compelling analysis of the potential chilling effect of American antitrust laws on competitiveness. This masterful book, essentially an operating manual of strategy and tactics for a new era, will be required reading for managers, planners, consultants, academics, and students of hypercompetitive industries.
