Sucess Factors in Merger and Acquisition

Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.

(a) In a merger agreement, the assets and liabilities of the firm which is being acquired end up being absorbed by the buyers firm. A merger could be the most effective and efficient way to enter a new market without the need of creating

Since more structured analytical tools, is likely to propose solutions mechanics for politically complicated issues, the formal procedures evaluation should not prevent the emergence of spontaneous informal contributions the decision-making process; Serve as a mechanism to communicate the company's goals and the staff of the involved parties. The analytical concepts and Content contained therein can help administrators to implement a program for acquiring which is robust, consistent and cost- justifiable (and WEINHOLD SALTER, 1981). According to Salter and Weinhold (1981), there are two approaches to making a acquisition function. The first emphasizes the strategic fit between the acquired companies for strategic objectives of the acquiring company. The second emphasizes the need to achieve organizational fit between the two companies combining systems administrative, company cultures or demographic characteristics. Sufficient degree of strategy and organization ensure success of the acquisition. Jemison and Sitkin (1986) identified the following factors inherent in the process can affect the outcome: fragmented aspects - The involvement of experts and analysts particular expertise and independent objectives, often carry multiple fragmented views. These experts, usually or often dominate the process of making a purchase due to the technical complexity of required analysis. Moreover, few of those involved experts have operational experience of the segments of

find little evidence of wealth creation, with shareholders of the target firms gaining at the expense of the bidder firms. A merger is said to create value, if the combined value of the bidder or target firm increases on the announcement of the merger (Houston et al., 2001) (Ghosh & Dutta, 2015) (Campa, 2004). Moreover, the synergistic gains hypothesis of corporate acquisitions underlined by Isa & Yap (2004) states that, a combination of two firms will result in a combined gain that is, more than the sum of the value of the individual firm. These gains may be attributed to the increasing efficiencies and synergies of the companies involved.

Notice that a merger analysis consists of two estimating issues which are projected merger cash flows and the appropriate discount rate. Sometimes, estimating cash flows in a merger is a little difficult so that we need to summarize the series of yearly cash flows and inflows. Mr Harry, we need to be aware, although Mr Jack is your friend, he may refuse to provide detailed information about Framingham Flange Factory’s future projections or past history. The second issue is the appropriate discount rate due to an acquisition is an equity transaction; it should be done using a discount rate that reveals the cost of equity

Islam, S., Sengupta, P., Ghosh, S., & Basu, S. (2012). The behavioral aspects of mergers and acquisitions: A case study from India. Global Journal of Business Research, 6(3), 103-112.

Prior studies have shown that SOX internal control disclosures should be relevant to M&A transactions. Weakness in internal control quality at the acquiring firm is likely to influence M&A performance through a pre-merger decision or post-merger effect. I suspect that weak internal control at an acquiring firm will ultimately lead to lower performance levels after the M&A. Weak internal controls will lead management to acquire firms through less accurate internal reports and forecasts. Once the M&A transaction is made, weak internal controls could impair management’s judgement and ability to effectively incorporate the target to capture anticipated synergies. I will be using a content analysis to construct

However, in some cases, consensus may not be reached. Then there are different tactics implemented by acquirer firm. Acquirer can make a tender offer. It means that acquirer goes directly to the shareholders of targeted company and buys their shares in return for some premium over the current market price. Before tender offer, there is asymmetric information between parties. Shareholders require a premium because they are informed. Perception to the targeted company in the market changes as fast as possible. We conclude that it is likely to see an overbidding in a hostile merger rather than a friendly merger. The reason is that the acquiring firm may inevitably pay higher premiums in order to gain at least 51% of target firm’s shares and shareholders can be convinced to sell their shares if the target’s management notified them about not to sell.

These few years, cross-border mergers and acquisitions have increased, accelerating the globalization of manufacturing and restructuring industrial structure at the worldwide level (Kang, N. and S, Johansson., 2000). Wal-Mart is one of the examples of real world cross-border mergers and acquisitions; this can enlarge the market reach. Wal-Mart was founded by Sam Walton with a single store in Rogers, Arkansas in 1962 and has grown to the world’s largest retailer, its headquarters are in Bentonville, Arkansas, United States. Wal-Mart extended its market by acquiring the biggest local retailer Massmart at South Africa, is also operates as ASDA in the United Kingdom and Seiyu in Japan. This increased Wal-Mart 's client base and has made Wal-Mart better known to the world (Z, Nie., 2013).

As we can see on attached charts - Market was not too sure about this merger (“On paper, the deal has much to commend it, many outsiders say”. But thorny issues remain, including how to accommodate the strains between consultants and auditors, potential conflicts of interest involving important clients and even the delicate matter of choosing a new name. If the negotiators are not careful, fallout could haunt the combined firm for years to come.) From the time when merger plans were made public Shares of

In this paper, I begin by describing and assessing the different criteria financial analysts within Fortune 500 companies use to evaluate merger success and acquisition rationale. I also discuss what these strategies can imply about the sources of gains and losses on each company’s stock price, and the factors that drive merger success in the long run. I then discuss the firsthand evidence of this merger and acquisition by examining transaction details from both parties and transitioning into an analysis of CB&I’s strategy for post-merger integration. Finally, I discuss the implications of

When we talk about acquisitions or takeovers, we are talking about a number of different transactions. These transactions can range from one firm merging with another firm to create a new firm to managers of a firm acquiring the firm from its stockholders and creating a private firm. We begin this section by looking at the different forms taken by takeovers.

Legalizing marijuana may seem as a good idea for the government to do as it can generate more jobs, more money, and have many health benefits, but it also leads to other problems people do not realize. They say it helps you feel good and it is less harmful than alcohol and tobacco. Right now there are a few states that have legalized the use of marijuana, where the media shows the positive side effects of the plant being legalized, but disregards the negative side effects legalizing marijuana has. Throughout this essay, I will be persuading you on why marijuana should not be legalized. Marijuana should not be legalized for a few reasons. First, marijuana use has negative health side effects, second, it increases the chances of using other drugs, and finally, it endangers public safety. So instead of focusing the advantages marijuana has, it also has disadvantages on why it should still remain illegal.

b. Choose any one of the various provisions in the merger agreement and explain the economic rationale for it and its implications for takeovers.

When one company acquires another one, the operations, policies, and practices need to be changed. In the case of multiple business segments with separate postretirement plans and the intention to eliminate each, many factors must be considered in relation to accounting reporting requirements. More specifically, the reporting for defined contribution, defined benefit, and other postretirement plans must be researched and the proper procedure to eliminate the two newly acquired segments must be understood.