StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Mergers And Acquisitions - Essay Example

Comments (0) Cite this document
Summary
This essay "Mergers And Acquisitions" investigates that the complexities of the corporate mechanics have been cited as some of the possible causes of these failures. Usually, mergers and acquisitions are primarily driven by the objectives of growth and survival…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Mergers And Acquisitions
Read TextPreview

Extract of sample "Mergers And Acquisitions"

Download file to see previous pages Usually, mergers and acquisitions are primarily driven by the objectives of growth and survival. A large company will seek to acquire a smaller company for the purposes of benefitting from certain synergies in various aspects of the business operation. This may include an expanded market segmentation or technological development. Companies with nearly the same market profile may merge to enhance the level of efficiencies of operation and minimize on operational costs. On the other hand, smaller companies may be willing to be acquired by bigger firms due to a hostile market environment or unpalatable market forces (Sherman, 2012, p. 67). In essence, mergers and acquisitions are aspects of business strategy. In business, there exists the possibility of a mismatch between strategy and reality. Errors of judgment by directors may lead to ill-conceived mergers and acquisitions particularly resulting from the effect of misguided information or the flux nature of the global market forces. It might be important to analyze the rising cases of failure from this perspective. Why Directors Prefer Mergers and Acquisitions Despite the recorded failures, corporate directors have continued to pursue mergers and acquisitions with remarkable determination. Usually, the pursuit of these goals is strategic in the sense that they aim at achieving a certain goal in the business operation. The synergistic benefits of engaging in mergers may tend to surpass the possible risks involved (Moeller & Brady, 2011). Directors often decide on mergers basing on certain strategic goals. Decisions are taken after cost-benefit analyses are conducted with regard to the possible risks involved in the purchase. A merger or an acquisition may present the most appropriate alternative to the growth and expansion alternatives available for the company (Sun, 2012). For instance, a company may want to expand its technological infrastructure within a specified period of time. Some of the factors to be considered include times, cost, and reliability of the development. The firm may choose to enlist the services of experts to carry out this particular development. Alternatively, the firm may choose to enter into a merger or engage in an acquisition with a firm that is already established in terms of technology with a sound technological infrastructure (Buckley & Ghauri, 2002, p. 22). This move would have saved the firm a substantial amount of money, which would be directed to alternative areas of development. Another reason why boards of directors still engage in mergers and acquisitions is to be seen in terms of expansion strategies. Market discourses of globalization and liberalization have brought about stiff competition in most areas of business operations. Mergers and acquisitions provide the most effective way for a company to consolidate its hold on a certain market segment with the short-term and long-term objective of locking out external competition (Lucks, 2007). When two large corporations enter into a merger, they are most likely to expand their market reach and intimidate other firms that may seek to operate in their business niche.  ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2750 words”, n.d.)
Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2750 words. Retrieved from https://studentshare.org/business/1400476-business
(Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2750 Words)
Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2750 Words. https://studentshare.org/business/1400476-business.
“Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2750 Words”, n.d. https://studentshare.org/business/1400476-business.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Mergers And Acquisitions

Mergers and Acquisitions: Merits and Demerits

... Mergers and Acquisitions: Merits and Demerits Table of Contents I. Introduction ………………………………………………………… 3 II. Definition of Merger and Acquisitions …………………………. 3 III. Theory of Merger and Acquisitions …………………………….. 4 a. Benefits Gain from Merger and Acquisitions …...… 4 b. Consequences of Merger and Acquisitions ...…….. 4 IV. Impact of Merger and acquisitions on UK Labour Market ….. 7 V. UK-Based Real Life Example of Merger and Acquisitions …. 8 VI. Conclusion ………………………………………………………….. 10 References ………………………………………………………………… 11 - 12 Introduction Merger and acquisitions is a corporate strategy used by most business owners when dealing with the buying, selling, or combining with another company to ease their finances...
7 Pages(1750 words)Term Paper

Merger and Acquisitions: Description and Characteristics

..., Jackson (2007, 40) ‘acquisitions can be a powerful tool to achieve growth, enter new markets and expand the range of a firm's capabilities; but with the highly competitive market for acquisitions and the correspondingly high acquisition prices, all too often transactions fail to create value for shareholders’. Today, mergers and acquisitions have been considered to be the most appropriate strategic scheme for firms around the world in order to enhance their power within their market or increase their value – although these targets are proved often unachievable. Current paper examines a specific issue related with mergers and acquisitions: the value created for the shareholders of the firms that participate in the relevant initiatives...
8 Pages(2000 words)Case Study

The Role of Financial Management in Successful Business Acquisitions and Mergers

...the strategic aim of acquiring a global presence through these mergers and acquisitions.Any merger or acquisition will require careful financial attention at all stages particularly because this is a financial consolidation of two corporate entities whereas the assets and liabilities will be shared.It is worth noting the difference between mergers and acquisitions as mergers are attributed to the consolidation of two corporations and acquisitions involve purchase of one organisation by another.This will be a decision based mainly on financial strategic management where the danger is that there will be a failure to meet...
15 Pages(3750 words)Essay

Mergers and Acquisitions on the Market

...On Mergers and Acquisitions Introduction There is more to the story of the beautiful princess kissing a handsome prince hidden in a toad’s body. There are many unlocking potentials and interconnecting events before the real thing should have come out. The points we have to deal: Why do corporations go on a merger? Why despite the high rate of failure in mergers and acquisitions corporations still insist in consolidation? Many still jump on the bandwagon. Donald C. Spitzer, the U.S. national partner in charge of the Global Financial Strategies (SM) practice of KPMG LLP, the U.S. accounting, tax and consulting firm, says: “More than 8 in 10 deals fail to enhance shareholder value because of poor planning or execution or both, yet...
8 Pages(2000 words)Coursework

Operational and Psychological Preparation for Mergers and Acquisitions

...Operational and Psychological Preparation for Mergers and Acquisitions Introduction The age of globalization has forced firms to use their fullest potential and resources to be able to stay competitive. To be successful is an almost vertical climb. Yet firms continue to seek growth and they see combinations as a form of growth. At the turn of the century, there was a sharp increase of the number of mergers and acquisitions following the economic growth and the internet bubble of the late 1990s. Firms insist on consolidation and many still jump on the bandwagon. In 1999, there was 36% increase in worldwide M&A activity, with the total amount rising up to $3.4 trillion. In the United States alone, M&A volume reached $1.75 trillion; Europe...
16 Pages(4000 words)Research Paper

Merger & Acquisitions Arbitrageurs' Risks

...Role of Arbitrageurs in the M&A Process Abstract The dissertation discusses the role of merger and acquisition arbitrageurs and the returns and risks which are intrinsically associated with risk arbitrage. The dissertation also attempts to give a logical explanation to the abnormal profits which risk arbitrageurs earn. Furthermore, the dissertation details the effects of risk arbitrage on shareholders, target firms as well as the effects of the types of corporate deals on arbitrage returns. Contents Introduction………………………………………………………………….. ..4 Literature Review………………………………………………………………5 Theory…………………………………………………………………………. 6 Rationale of the Research………………………………………………………6 Analysis of the abnormal profits earned by the Risk...
29 Pages(7250 words)Dissertation

Accounting for Acquisitions

... the provisions of IFRS 3 in their decision – making process for future acquisitions. Conclusion In summary, IFRS 3 may be one of the more complex standards ever written and may also be one of the most important. Mergers and acquisitions (M&As), which are the topics of this standard, are of so importance to the entity, both due to their costs and their relevance to the business. Proper application of IFRS 3 and full disclosure of the transactions are thus needed for the investors and other users to have a grasp of the rationale behind such M&As and their impact to the company’s future and business. The FRC study has highlighted the basic problems with the provisions and the actual application of IFRS 3. The study has also pointed out...
8 Pages(2000 words)Assignment

Acquisitions and Mergers

...Acquisitions and Mergers “There are various theories that attempt to explain a firm’s motive to engage in merger or acquisition activity. With reference to the evidence provided in the academic literature, critically evaluate the extent to which various merger/acquisition theories help explain companies strategies on mergers and acquisitions “. Introduction Mergers and Acquisitions (M&A) is a common phenomenon and term used in business echelon. It is a part of organisational strategy to expand the business of a company or to acquire benefits from another company such as technological and other advancements of another company to their own benefit. It generally relates to management and corporate finances dealing with buying, selling...
11 Pages(2750 words)Dissertation

Cross Border Acquisitions and Synergies

...that are connected to both these areas. 5. Literature review 5.1 Mergers and Acquisitions In order to understand the terms used in this study, mergers and acquisitions need explanation. Merger refers to the legal consolidation of two separate companies into a single entity (Auerbach, 2008). An acquisition happens when one company decides to take control (acquire) another and in so doing establishes itself as the owner (Auerbach, 2008). Under this approach, the acquired company retains its identity but is controlled by the acquiring entity (Auerbach, 2008). Usually, an acquisition is referred to as a...
36 Pages(9000 words)Literature review

Culture, Change/Integration in Mergers and Acquisitions

...40 TABLES AND FIGURES Table 1 – Acquisition History of Premier Foods plc 9 Table 2 - Review of Inductive and Deductive Research 18 Figure 1 – Premier Foods Stock Performance 10 Abstract Mergers and acquisitions represent waves of consolidation in all industry fields that occur on a periodic basis. Some recent well-known examples as represented by Time Warner and AOL, Mercedes Benz and Chrysler, to name a few, have been...
30 Pages(7500 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Mergers And Acquisitions for FREE!

Contact Us