Strategic Rationale For The Acquisition Of Myer Holdings Limited

Mergers and Acquisitions (M&A) typically refers to a corporate fiscal and strategic set of strategies that deal with the purchasing, selling, and/or combining of different companies or pieces of companies that are able to help grow a company or experience rapid innovation with either creating another business entity or investing research and development from the ground up (Hennepopf, 2009). Modern organizations are so highly complex and competitive that the old paradigm improving efficiency and the bottom line improves, is no longer all it takes to be successful. Companies must continue to reinvent themselves, put Board egos aside and look at the marketplace, their expertise, and what they can do to retain market share. With technology changing so

In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method of accounting for business combinations followed by limited coverage of the purchase method and pooling of interests provided in a separate sections.

During last few years, the premium department stores suffered from low market demand due to the impact of the Global Financial Crisis. As a result of this, since 2006, Myer has spent $400 million to make business turnaround and rebuild cost structure.

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.

Firms are acquired for a number of reasons. In the 1960s and 1970s, firms such as Gulf and Western and ITT built themselves into conglomerates by acquiring firms in other lines of business. In the 1980s, corporate giants like Time, Beatrice and RJR Nabisco were acquired by other

The acquisition brings together two iconic Canadian brands and harnesses the complementary strengths of the nation's number-one grocery retailer and number-one pharmacy and beauty retailer. It strengthens both companies' competitiveness in an evolving retail landscape, creating new growth opportunities for shareholders. It will give consumers more choice, value and convenience through Canada's largest retail network of unmatched store formats, including Shoppers Drug Mart's important and growing footprint in the small-urban store sector. (News Release Details)

The single bigger event in the Australian department sector has been the potential overtaking of David Jones. Myer offered very little commentary on the proposed merge, however it did show enthusiasm as their estimation saw a yearly benefit of $85 million a year within three years. Myer also organised a debt financial facility of $500 million. Appointing a strategic advisory to review the proposal of the synergies was also seen as positive activity on the merge. However, the negative sales

The goals of mergers range from reducing the number of competitors, to access of new products (Belcourt et al., p 330). Statistics show that 80% of new product developments fail (Howells, 2011), partly due to challenges and conflicts with human resources functions. Mergers and acquisitions are the fastest way to enter new markets. “It is estimated that 1/3 of all mergers fail due to faulty integration of diverse operations and cultures,” (Chhinzer, 2013). Therefore, the success of a merger or acquisition lies in the ability to guide, motivate, retain, and effectively use

Using the Strategic Analysis Framework (Appendix 1) below are the reasons why Adtranz was a strategic target for BBD:

Haspeslagh and Jemison (1987), argue that what determines the success of a acquisition is not the actual purchase itself, but the development of the acquisition strategy the supports. Unfortunately, many executives face the acquisitions as an end, not a means to achieve that end. According to this author, the acquisition is only one strategy business growth. There are others as internal growth, joint venture, partnership, franchise and strategic alliance. All should be evaluated by the company before implementing a business development strategy. A proper analysis of the acquisition goes beyond the study's own candidate company. It must include a contribution from the analysis of potential acquisition for the strategic development, as well as

Later Rayovac Company’s (spectrum) diversification into other four industries could have been lead by the attractiveness these companies as seen in the attachments (attachment A), the first acquisitions of Remington Products Company and United Industries Corporation had very good scores on the basis of attractiveness weighted score at 7.70 and 7.1 respectively which analyst would say was way above the averages. The other two acquisitions which had an almost related

During the late 1950s and early 1960s, several large corporations began acquiring other companies to diversify their operations. Diversification allowed them to offset their losses in a failing industry with profits from other unrelated, successful industries. Such phenomena caused

One of Australia’s most iconic brands has fallen from the ranks of the top two hundred public companies in Australia. Since late 2009 Myer has gone into a decline, with its stocks losing over 85% of its original value. As of the 9th of March, Myer was worth $363 million dollars (A far cry from its original and is one of the lowest performers in the share market with shares worth only 43 cents.

Moreover, Cooper’s corporate strategy is diversification through acquisitions and mergers. This diversification is in both related and non-related

The strategy is a way to bypass the time and resources entailed in achieving organic growth. With mergers and acquisitions, growth occurs by finding complementary alliances among the competition. Although an ample upside is associated with a successful merger or acquisition, potential risks dictate prudence before companies tie the knot.