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

Mergers and acquisitions process - Essay Example

Comments (0) Cite this document
Mergers and acquisitions (M&A) involve a bidding (buying) firm buying a target firm and are a way for companies to grow through a strategy of corporate diversification and vertical integration. Empirical evidence shows that an M&A strategy is more successful if both firms are strategically related than unrelated…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.5% of users find it useful
Mergers and acquisitions process
Read TextPreview

Extract of sample "Mergers and acquisitions process"

Download file to see previous pages Despite these findings, companies continue to adopt an M&A strategy for several reasons.
One reason is that M&A meets the desire of firms to survive by growing. Another is that the bidding firm either has free cash flow (and cash is king!) or wants to get the free cash flow of the target firm. A third reason points to so-called agency problems between the managers of the bidding firm and the owners of the firm, where managers want to get a larger share of the rewards for taking risks and managing the firm. Another reason is that managers of the bidding firm are overconfident and proud. The fifth reason is the bidding firm might gain some benefits by implementing the M&A strategy that, by putting two firms together, may result in valuable, rare, and costly to imitate advantages. It can also happen that a bidding firm sees some hidden sources of competitive advantage in the target that competitors do not see or that the managers of a target firm either do not realize or could not turn into a source of competitive advantage. This is where a bidder can be justified for merging with or buying a target firm because the two firms would create an added advantage (synergy) over other competitors through economies of scope or scale.
Implementing M&A is difficult and demands very good managers because the cultures of both firms may be very different. In the case of international M&A, this strategy may be costly because of differences in country cultures (like when Renault of France bought Nissan of Japan) and would need good managers to succeed. An ideal cross-country M&A is one where economies of scope can be gained without having to integrate the different firm and country cultures.
Case 3-1: eBay
eBay is a pioneer online auction firm that had to decide how to create more value from a new strategy of going into on-line auction drop-off selling to increase sales. Drop-off selling refers to selling items online for other people, with a seller or consignee collecting items for sale from the client or consignor. The consignee handles the whole listing and selling process and then pays the proceeds of the sale to the client, less the commission. This would capture sellers who have items to sell but who neither have the time nor the patience to advertise these items on-line.
The company's initial success, built on a first-mover advantage as an on-line auction site, became the foundation for a cost leadership growth strategy achieved by offering low listing fees. In the process of accelerated growth in numbers of customers and sales volume, eBay developed into an on-line community that offered unmatched speed, safety, and security through an effective member feedback mechanism where users rated each other for every transaction made.
eBay's profits grew by attracting more buyers and building the infrastructure needed to support both buyers and sellers. However, like brick-and-mortar shops, eBay's sales were seasonal, spiking during the holiday season but remaining flat the rest of the year. The drop-off selling strategy, a form of diversification into a related business that would add value to the core business of on-line auctions, was designed to increase customer traffic to its sites by making it easier for sellers to list their goods and for buyers to enjoy a wider variety of products to choose from. It also allowed eBay to transact high value-added items and compete with the more established ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Mergers and acquisitions process Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Mergers and acquisitions process Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from
(Mergers and Acquisitions Process Essay Example | Topics and Well Written Essays - 1000 Words)
Mergers and Acquisitions Process Essay Example | Topics and Well Written Essays - 1000 Words.
“Mergers and Acquisitions Process Essay Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Mergers and acquisitions process

An Effective Planning Process

Managements first and the most fundamental problem is selecting the right individuals with the prospective for development. evenly important is the placement of those individuals in positions in the organizational structure where their talents are most desired.
Manpower development instigates with human resources planning also known as manpower planning, which establishes a firm's specific personnel rations. These are attained by a qualitative fortitude of the individual job specifications and of the specific characteristics required of a person for the successful performance of each job. Once these job requirements are recognized, it is essential to forecast the number of persons desired for each job. This stage of employmen...
11 Pages(2750 words)Coursework

Process Mapping Techniques and Organizational Analysis

Nitse, Parker, and Dishman (2003) contend that today multitudes of tools are available to gather market competitive intelligence and unless these tools are equipped with an adequate specification of the environmental variables that need to be monitored, their information gathering will be inadequate. As important as the information gathering methods are, it is equally important to understand what information to look for. The information gathered must be able to provide a historical snapshot of competitor statistics across multiple behavioural indicators and it should be able to detect trends and shifts in technology. The goal of any information gathering system is high recall and precision.

According to Kim, Suh and Hwa...
6 Pages(1500 words)Essay

Marx and Engels on the Labour Process and Class Relations

Furthermore, Marxism states that as people may be divided into classes, where one class may hold influence over the other, the solution to economic and social harmony is to develop sympathy for humanity as a whole to support the working class. The main structure of the theory revolves around the betterment of the working class through their liberation and clarification of a purpose and cause. Human nature has always been a complex topic to discuss and to integrate the understanding of human nature with socialism has been harder (Lassman, 2000).

It may have been argued that since people, in general, are greedy and as a natural instinct are ambitious- they may always want a bigger share of the scarce resources and try to...
9 Pages(2250 words)Term Paper

Information Systems Development Process

When a project has an obvious objective to be attained and the effort is very small, common sense and attention to what the client wants can be a suitable alternative to more complicated and formal methods. However, when the software system becomes more complex, the objectives are multiplied and start to depend on different configurations and circumstances, it becomes imperative to structure the development effort to avoid software development that does not answer the clients need, or does not have the requisite level of quality, or becomes impossible to forecast in terms of time and budget – or a combination of any of the preceding.

In situations of complexity in software development, structure methods seek to im...
13 Pages(3250 words)Assignment

The Importance of Strategy Process

This is so done because the advantage is much needed in such a scenario and it will help the organization to grow beyond the anticipated proportions. Building and indeed sustaining this advantage is a very significant exercise when one speaks of a competitive advantage in the first place. Competitive advantage is something that is built over time and requires synchronization between the tactics, activities and the overall strategy of the company which is producing the product(s). Competitive advantage is developed when there is a differential undertaking on the part of the customer. This could be in the form of lower prices than the competitors, better quality, efficient sales services, and support and a number of other features....
10 Pages(2500 words)Assignment

Future Digital Design Process

As we shape up the interface between the designer and the virtual environment we are naturally going to produce a greater and far better outcome.
It will enable the end-user to be more creative and experimental and explore possibilities that were previously tedious or impossible. The design possibilities of virtuality will enhance the outlook of environments.
Now we can also term it according to the duration it can last. For any new thing, the duration is 10-30 years. If it lasts for 10 it would be popular as a tool another 10 and it would very well be a theory and if it survives all 30 years it will soon be defined as a revolution.
It was the end of the 20th century and the beginning of the 21st century that saw th...
21 Pages(5250 words)Assignment

A Six Stage Model of the Innovation Process

This paper will focus on the relationship and impact and innovation will have on politics. The backbone of the paper will be the strong opinion of Professor Langdon Winner who teaches at the Department of Science and Technology Studies. He has said that “technical things have political qualities” and this paper will base its study on this. “Langdon Winner is a political theorist who focuses on social and political issues that surround modern technological change.” (Brief Biography). When undertaking a serious study of the topic, so many theories and assumptions also begin to emerge that are related to the topic. They include concepts like SCOT, Actor-Network Theory, determinism, closure, and other related f...
9 Pages(2250 words)Case Study

Marks and Spencer Organizational Development Process

...Table of Contents Page No INTRODUCTION 2 BODY 2 Anticipating the Need to Change, Problem and Area for Improvement 3 Impact of Organization’s Culture 3 Client and Practitioner Considerations 5 Diagnostic Process and Data Collection 5 Overcoming Resistance to Change 5 Institutionalization Action Plan and Timeline 6 Action Plans, Strategies, and Techniques 7 Specific Intervention Analysis 7 CONCLUSION 8 REFERENCES 9 Introduction: Marks and Spencer is major retail business group having over 125 years of retail business experience. Its operations are widely expanded in domestic and international markets...
7 Pages(1750 words)Case Study

Learning and Memory Process

...Profile Report This report compares and contrasts the answers provided by the interviewees X and Jason. Learning and memory process Interviewee X prefers to learn by observation and has the ability to give directions to a place that X has earlier visited. Jason also prefers to learn by observation. Interviewee X prefers to work in silence to avoid distraction whereas Jason prefers distractions as they force him to concentrate. Quietude makes his mind wander. Interviewee X’s preference to work in silence points to the use of committing work to the long term memory. Jason displays a preference to utilize short term memory for his work since it has the capacity to focus on the work at hand despite distractions around. The use of short term...
6 Pages(1500 words)Assignment

The Wright Brothers' Creativity Process

Through their knowledge and creativity, the two endured difficult childhood in a family of seven to become successful business people who traded their intelligence thereby championing the development of airplanes among other related technologies.
Born and raised in Richmond Indiana, the two brothers attended high school but failed to obtain their high school diplomas since their family made an abrupt move from Indiana to Dayton, Ohio. The inability of the two to receive their high school diplomas was among the factors the prompted thee two to enter business thereby providing them with adequate opportunity to carry out several tests on their creativity leading to their invention of the airplane. Among their preliminary inventi...
6 Pages(1500 words)Case Study
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 process for FREE!

Contact Us