The failure risk in M&A
Abstract: With the development of business and regulation, more and more companies seek to increase revenue, search for further growth and lower cost through merger or acquisition. There are many motives behind the M&A activity. But according to in depth analysis of studies conducted from 1979 to 2000, About 14 of 24 studies report positive combined returns, it means about 40% combination didn’t bring positive returns for acquiring companies’ shareholders. In this article, I will illustrate why the acquirer didn’t perform well after the purchase and why some M&A activity didn’t come true.
Key words: Merger and acquisition, Synergies, Valuation, People, Value;
Ⅰ An introduction to M&A
Companies choose merger and acquisition activities for many reasons. Briefly speaking, the companies use merger and acquisition to achieve growth, or diversify their business. They can change current operation condition through merger or acquisition. The first......
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Approximate Word Count: 2552
Approximate Pages: 10 (260 words per double-spaced page) |