Sucess Factors in Merger and Acquisition

(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

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.

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.

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.

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

The paper differs from others as it will provide insight and evaluation into which event during the merger process had the largest effect and identify whether this was the same for both firms, especially since the merger was undertaken in a tough regulatory environment which contains many “hurdles” (). The results of this paper could be attributed to other firms in the industry or, potentially, to other industries with similar regulatory structures.

The inherent business practice of acquiring other , usually competitive, companies is part of a risky but potentially big payout for the risk taker. To understand the true and relative impacts of mergers and acquisitions, it is necessary to examine organizations that both avoid and undertake these types of financial deals. The purpose of this essay is to examine two distinct companies and their business strategies in order to understand the practicality and feasibility of corporate mergers.

According to Parnell, “The attractiveness of mergers and acquisitions seems intuitively obvious: Two firms join forces and the combined organization possesses all the strengths of the individual firms” (2006).

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

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

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