Deals From Hell -Bruner - Book Report/Review Example

Deals from Hell- Robert Brunner Questions from are sometimes perplexing, which can prompt a reply that is very important. It is for this reason that this book sought to present a more discipline and sharper thinking to the science of M&A and financial markets. Bruner has been able to extract the instructive lessons through careful examination of a series of M&A wrecks. Bruner presents his knowledge by artful contrasting failures with other deals where different results are as a result of greater discipline and care.

The book surveys failures in mergers and acquisitions, drawing its findings from a number of deep reviews of research studies and case studies from ten noticeable failures. The conventional wisdom about M&A is greatly challenged by the author. In the same way, the author enriches ability of anticipating failure and promoting success. Merger is simply consolidating two firms to create a new entity by law (Brunner, 2005). It is clear that M&A does pay for bidders, both on average and overtime; however, the return variance is sizeable whereby one cannot meet the average return with confidence by simple naive acquisition.

Managers and investors should be ready for disappointments by suppressing overconfidence. This is so because the market for acquisition very segmented, thus returns to investors also vary across the segments. This is why broad assertions about the success and failure of M&A are less significant. Comparison of failure cases in details are based on six elements in common, which are spread individually across the business environment. The convergence of these failure cases in the context of merger is what elevates the likelihood of failure.

Since failures in mergers result from a number of factors, preventing failures must be by attacking the factors in a systematic combination. As Bruner points out in his book, financial risks in M&A are part of the cost of doing business. This can stop at a potential greater expense to society, or learn right ways of doing business for higher percentage success. Bad deals have resulted to huge failures for shareholders as demonstrated by the book. But success comes to those who learn ways of succeeding by understanding failure.

With M&A, there are always winners and losers, and at the same time, knowledge combined with discipline can bring greater results. For instance, Warren Buffet’s Berkshire Hathaway has acquired companies worth $45 billion between 1982 and 2003. Does this make him a great investor or an M&A specialist? The company has realized an annual compound rate of 27 percent with a share price of $86,650 by September 2004. What does this implies? That greater care and thinking is needed when future M&A deals are to be launched.

This will ensure greater returns to the society as well as the investors. Each and every M&A success has a bust, which is typically spangled with spectacular collapses of merged firms. The public minds are shaped with these significant failures, so is strategies of doing business and public policies (Davis, 2012). Study of M&A failure require that one face it not merely as a form of entertainment, but as a pillar for workable policies and practices in the future waves of M&A. Businesses are pervaded by failure, over 90 percent of business proposals are typically rejected by venture capitalist, and a big number of new businesses fail not long after their foundation (Nesvold et al., 2011). For instance, in 1925, 501 firms were listed on the New York Stock Exchange, and only 13 percent of the listed firms exist in their independent corporate form by 2004.

Failure is regarded as a constant companion within healthy growing businesses. Studying M&A failure is a catalyst to business insight. Just as engineers study mechanical and structural failure, business schools study cases that consider success and failures (Brunner, 2005. This is why the book gives the first focused study of failures in M&As. The book might have an insight that M&A failure is a complicated matter, which is as a result of convergence of forces. However, in a different dimension, perhaps a quick and dismissive argument, merger failures might be due to bad leadership in the executive suite.

This is why Brunner states that he wrote the book to fill the gap of understanding in addressing four key questions. The author provide answers to merger failure and how one can measure it, the prevalence of failure among M&A, causes of merger failure, and implications of ones answers for managers and policy makers. The author provided his answers through 10 case studies of big M&A failures. Given the complexity of M&A deals, good practices cannot be reduced easily. It is for this reason that case studies help a lot in in-depth practitioner envision what can go wrong and how to go about it.

The book suggests that success depends more on adopting the right attitude towards M&A as a path of corporate growth. Studying M&A failure is not a sure formula for success; rewards are not easy to sustain over time, thus M&A should be undertaken with serious planning and preparation, with efforts motivated by the right values and respect to investors. Reference Bruner, R. F. (2005). Deals from hell: M & A lessons that rise above the ashes. Hoboken, N.J: Wiley. Davis, D. A. (2012). M&A integration: How to do it: planning and delivering M&A integration for business success.

Chichester: Wiley. Nesvold, H. P., Anapolsky, J., & Lajoux, A. R. (2011). The art of distressed M&A: Buying, selling, and financing troubled and insolvent companies. New York: McGraw-Hill.