Mergers and Acquisitions: A Guide to Creating Value for Stakeholders

Mergers and Acquisitions: A Guide to Creating Value for Stakeholders

Mergers and Acquisitions: A Guide to Creating Value for Stakeholders

Mergers and Acquisitions: A Guide to Creating Value for Stakeholders

Synopsis

In 1999, MCI WorldComm and Sprint agreed to merge. Valued at $129 billion, this expected transaction was the largest in history. However, it fell victim to regulators in Europe concerned with the potential monopoly power of the merged firm. This M&A action was merely the latest in a growing trend of "blockbuster" mergers over the past several years. Once a phenomenon seen primarily in the United States, mergers and acquisitions are increasingly being pursued across national boundaries. In short, acquisition strategies are among the most important corporate-level strategies in the new millennium. The need for clear, complete, and up-to-date guide to successful mergers and acquisitions had never been greater. This book more than fills that need. Looking at successful--and unsuccessful--mergers and acquisitions in a number of different industries, Mergers and Acquisitions: A Guide to Creating Value explains how to conduct an acquisition and how to avoid pitfalls that have doomed many such ventures. The authors take the reader step-by-step through the process, starting with the elements of a successful merger, due diligence to ensure that the target firm is sound and fits well with the acquiring firm, and how mergers and acquisitions are financed. They move on to explore how firms find partners/targets for acquisitions that have complementary resources and how to find partners with which integration and synergy can be achieved. Finally, they discuss the potential hazards found in M&A's and how to avoid them, how to conduct successful cross-border acquisitions, and how to ensure that ethical principles aren't breached during the process. Based on 15 years of research, this essential guide goes beyond specific case studies to cover all aspects of these ventures, making it required reading for all managers seeking to build a successful strategy.

Excerpt

The number and size of mergers and acquisitions being completed continue to grow exponentially. Once a phenomenon seen primarily in the United States, mergers and acquisitions are now taking place in countries throughout the world. It is clear that acquisitions have become one of the most important corporate-level strategies in the new millennium.

Because of the importance of acquisition strategies to firm growth and success in the twenty-first century, we have written this book as a guide to help managers navigate a successful merger or acquisition. We explain the actions and processes of executing effective mergers and acquisitions. We also describe some of the major problems confronting managers who are planning such strategic actions.

Our book is grounded in research on many firms in a number of industries and we describe multiple examples of successful and less successful mergers and acquisitions. Although their number and size are increasing, many mergers and acquisitions fail—or at least do not reach their potential. Furthermore, some of these failures have been highly publicized. To explain these less-than-intended outcomes, and, more important, to describe actions that lead to merger and acquisition success, we were motivated to write this book. We have conducted research on mergers and acquisitions for the last 15 years. While the basis for our book is grounded in this research, the book goes beyond our prior research. Our goal was to write a complete guide for executing successful mergers and acquisitions. We explain how to conduct an acquisition and also how to avoid major potential pitfalls. The book describes the due diligence process and how acquisitions are financed. We explore how firms find partners/targets for acquisitions that have complementary resources, an important characteristic for acquisition success. The process of seeking and finding cooperative mergers and achieving integration and synergy are explored in two separate chap-

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