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Mergers and Acquisitions on the Market - Coursework Example

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The paper "Mergers and Acquisitions on the Market" discusses that there will be “marriages” and takeovers of big organizations and hostile takeovers in the business world. But there is nothing to be afraid if M&As are carefully planned and handled by responsible and expert teams…
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Download file to see previous pages “More than 8 in 10 deals fail to enhance shareholder value because of poor planning or execution or both, yet, by contrast, most of the executives interviewed (82%) believed their deals were successful.” (KPMG Press Release)
One of the causes of merging is a competition or the thought of managements that they could dominate the market if they get other companies to join them. But there are grave consequences to their action if things are not well planned. And planning a merger and acquisition involves many things to include cultural, employees’ feelings and attitude, not to mention the technical and financial sides of the bargain.
“It seems that almost daily one hears of corporations – some willingly, some not – involved in such transformations as part of a strategy designed to achieve corporate growth, economies of scale, vertical integration, diversification, and even provision of capital for future leveraged buyouts.” (Buono and Bowditch 3)
There is this danger in merger mania but corporations seem to ignore. KPMG International conducted a study in 1999 on 700 of the most expensive deals from 1996 to 1998. “Summary of findings: 83% failed to boost shareholder wealth. 53% reduced shareholder wealth.” (Grubb and Lamb 155)
Once merging and acquisition are in the offing, two and more managements are in double time. They have to prepare and commit themselves to activities and events they do not really know. In fact, they are unprepared for the eventualities. And instead of doing the regular business of the day, they become more preoccupied with the new activities of an entirely new company. And there will be more and more jobs to be done. Management and employees become preoccupied with new things instead of their usual job.
Grubb and Lamb studied some of the worst takeovers in American businesses, and they said, “Merger failure is not a recent phenomenon nor is it a single isolated measurement at one moment in time. ...Download file to see next pagesRead More
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