Trends in M&As<\/p>\n
Trends in M&As<\/p>\n
Trends in M&As<\/p>\n
Agenda<\/p>\n
Strategy assignment<\/p>\n
Trends<\/p>\n
Performance<\/p>\n
Motives<\/p>\n
Firm and environment characteristics <\/p>\n
Integration<\/p>\n
Strategy report<\/p>\n
Write a strategy report based on your analysis of either one of these companies: Air New Zealand, Fletcher Building, Fonterra, Spark, or The Warehouse Group. The analysis feeding into this report should effectively apply appropriate analysis tools.<\/p>\n
2000 words max length<\/p>\n
The report should include:<\/p>\n
Executive summary<\/p>\n
Introduction<\/p>\n
Short summary of the challenge (assignment 1)<\/p>\n
Analysis and recommendation of a strategy to address the challenge<\/p>\n
Conclusion<\/p>\n
Appendix<\/p>\n
Today\u2019s learning objectives<\/p>\n
Understand trends in M&A activity<\/p>\n
Learn about reasons for M&A activity<\/p>\n
Understand problems with M&A activity <\/p>\n
Learn about restructuring activities<\/p>\n
Number of Transactions<\/p>\n
Number of TransactionsMergers & Acquisitions Worldwide<\/p>\n
Cross-border Mergers & Acquisitions<\/p>\n
0<\/p>\n
500<\/p>\n
1,000<\/p>\n
1,500<\/p>\n
2,000<\/p>\n
2,500<\/p>\n
0<\/p>\n
4,000<\/p>\n
8,000<\/p>\n
12,000<\/p>\n
16,000<\/p>\n
20,000<\/p>\n
1985<\/p>\n
1986<\/p>\n
1987<\/p>\n
1988<\/p>\n
1989<\/p>\n
1990<\/p>\n
1991<\/p>\n
1992<\/p>\n
1993<\/p>\n
1994<\/p>\n
1995<\/p>\n
1996<\/p>\n
1997<\/p>\n
1998<\/p>\n
1999<\/p>\n
2000<\/p>\n
2001<\/p>\n
2002<\/p>\n
2003<\/p>\n
2004<\/p>\n
2005<\/p>\n
2006<\/p>\n
2007<\/p>\n
2008<\/p>\n
2009<\/p>\n
2010<\/p>\n
2011<\/p>\n
2012<\/p>\n
2013<\/p>\n
2014<\/p>\n
2015<\/p>\n
2016<\/p>\n
2017<\/p>\n
2018<\/p>\n
2019<\/p>\n
2020<\/p>\n
Value of Transactions (in bil. USD)<\/p>\n
Number of Transactions<\/p>\n
0<\/p>\n
500<\/p>\n
1,000<\/p>\n
1,500<\/p>\n
2,000<\/p>\n
2,500<\/p>\n
0<\/p>\n
4,000<\/p>\n
8,000<\/p>\n
12,000<\/p>\n
16,000<\/p>\n
20,000<\/p>\n
1985<\/p>\n
1986<\/p>\n
1987<\/p>\n
1988<\/p>\n
1989<\/p>\n
1990<\/p>\n
1991<\/p>\n
1992<\/p>\n
1993<\/p>\n
1994<\/p>\n
1995<\/p>\n
1996<\/p>\n
1997<\/p>\n
1998<\/p>\n
1999<\/p>\n
2000<\/p>\n
2001<\/p>\n
2002<\/p>\n
2003<\/p>\n
2004<\/p>\n
2005<\/p>\n
2006<\/p>\n
2007<\/p>\n
2008<\/p>\n
2009<\/p>\n
2010<\/p>\n
2011<\/p>\n
2012<\/p>\n
2013<\/p>\n
2014<\/p>\n
2015<\/p>\n
2016<\/p>\n
2017<\/p>\n
2018<\/p>\n
2019<\/p>\n
2020<\/p>\n
Value of Transactions (in bil. USD)<\/p>\n
Number of Transactions<\/p>\n
5000<\/p>\n
10000<\/p>\n
15000<\/p>\n
20000<\/p>\n
25000<\/p>\n
30000<\/p>\n
35000<\/p>\n
40000<\/p>\n
45000<\/p>\n
50000<\/p>\n
Professional Services<\/p>\n
Building\/Construction & Engineering<\/p>\n
Transportation & Infrastructure<\/p>\n
IT Consulting & Services<\/p>\n
Internet Software & Services<\/p>\n
Other Consumer Products<\/p>\n
Automobiles & Components<\/p>\n
Food & Beverage Retailing<\/p>\n
Number and Value of M&A by Target Industry (1985<\/p>\n
–<\/p>\n
2016)<\/p>\n
Number<\/p>\n
Value<\/p>\n
5000<\/p>\n
10000<\/p>\n
15000<\/p>\n
20000<\/p>\n
25000<\/p>\n
30000<\/p>\n
35000<\/p>\n
40000<\/p>\n
45000<\/p>\n
50000<\/p>\n
Professional Services<\/p>\n
Building\/Construction & Engineering<\/p>\n
Transportation & Infrastructure<\/p>\n
IT Consulting & Services<\/p>\n
Internet Software & Services<\/p>\n
Other Consumer Products<\/p>\n
Automobiles & Components<\/p>\n
Food & Beverage Retailing<\/p>\n
Number and Value of M&A by Target Industry (1985<\/p>\n
–<\/p>\n
2016)<\/p>\n
Number<\/p>\n
ValueMetals & Minin<\/p>\n
\u201dA review of 167 empirical academic articles showed that on average firms do not benefit from acquisitions, but there are conditions and situations in which firms do benefit\u201d<\/p>\n
Haleblian, Devers, McNamara, <\/p>\n
Carpenter and Davison JOM 2009<\/p>\n
\u201dCompanies spend more than $ 2 trillion on acquisitions every year. Yet study after study put the failure rate of M&A somewhere between 70% and 90%.\u201d<\/p>\n
Christensen, Alton, Rising and Waldeck <\/p>\n
HBR 2011<\/p>\n
Mergers and acquisitions<\/p>\n
Merger<\/p>\n
Combination of two (equal) firms<\/p>\n
Seldom exist in practice<\/p>\n
Acquisition<\/p>\n
One firm buys a controlling stake in another firm<\/p>\n
Types<\/p>\n
Horizontal<\/p>\n
Related<\/p>\n
Vertical<\/p>\n
Unrelated<\/p>\n
Cross-border (international)<\/p>\n
The acquisition process<\/p>\n
\u2022 Deal characteristics only explain a small fraction of variance in M&A outcomes (King et al., 2004)<\/p>\n
Motivation<\/p>\n
Negotiation<\/p>\n
Deal<\/p>\n
Integration<\/p>\n
Outcome<\/p>\n
Focus today<\/p>\n
Due diligence<\/p>\n
Motivation<\/p>\n
Negotiation<\/p>\n
Deal<\/p>\n
Integration<\/p>\n
Outcome<\/p>\n
Focus today<\/p>\n
Due diligence<\/p>\n
Value creation in acquisitions<\/p>\n
Discussion<\/p>\n
DiscussionWhat is value creation in acquisitions?<\/p>\n
How should you determine if a potential acquisition should be pursued (pre-acquisition)? <\/p>\n
How do you know if your acquisition was successful (post-acquisition)?<\/p>\n
Value creation in acquisitions<\/p>\n
Market base measures of performance<\/p>\n
Cumulative abnormal returns around announcement date<\/p>\n
Most studies find no or a negative effect<\/p>\n
Accounting base measures of performance<\/p>\n
Ratios (e.g. ROA, ROS, etc.), cash flow, growth (e.g. sales, profit)<\/p>\n
Considerations: Temporal horizon, level of analysis (acquirer, target, both)<\/p>\n
Most studies find no or negative effects for ratios and growth measures but some positive effects for cash flow.<\/p>\n
Acquisition motives and value creation<\/p>\n
Value creating motives:<\/p>\n
Market power (+)<\/p>\n
Efficiency (+)<\/p>\n
Resource (re)combination (+)<\/p>\n
Synergy (+)<\/p>\n
\u2018Turnaround\u2019 (+)<\/p>\n
Financial (e.g. tax) (+)<\/p>\n
Value neutral motives<\/p>\n
Speed<\/p>\n
Market entry<\/p>\n
Scope adjustment<\/p>\n
\u00be Strategic & organisational fit<\/p>\n
M&As gone wrong<\/p>\n
Main motive<\/p>\n
Synergies in distribution, product design and R&D<\/p>\n
The promise was never realised<\/p>\n
In 2001 the market value of DaimlerChrysler dropped to 44 billion<\/p>\n
In 2007 Chrysler was sold (remaining stake in 2009) with a direct financial loss of 37 billion. <\/p>\n
Firm and environment characteristics<\/p>\n
Experience<\/p>\n
Performance<\/p>\n
Size<\/p>\n
Uncertainty<\/p>\n
Regulation<\/p>\n
Imitation\/Waves<\/p>\n
\u2022 Managers <\/p>\n
Due diligence<\/p>\n
Strategic fit<\/p>\n
Capitalization & ownership<\/p>\n
Financial matters<\/p>\n
Material contracts<\/p>\n
Physical assets & real estate<\/p>\n
Intellectual property & other intangible assets<\/p>\n
Customers, marketing & sales<\/p>\n
Product liabilities and warranties<\/p>\n
Matters related to production & R&D (incl. suppliers)<\/p>\n
Employee-related matters<\/p>\n
Management-related matters<\/p>\n
IT-related matters<\/p>\n
Litigation<\/p>\n
Tax matters<\/p>\n
Antitrust & regulatory issues<\/p>\n
Environmental issues<\/p>\n
Insurance<\/p>\n
Compliance with filings<\/p>\n
Integration<\/p>\n
Multiple sub-processes<\/p>\n
strategic integration of activities and resources <\/p>\n
social and cultural aspects <\/p>\n
Dynamic in nature, and characterized by complexity, ambiguity, and contradictions <\/p>\n
Source: P. Haspeslagh and D. Jemison, Managing Acquisitions, Free Press, 1991.<\/p>\n
Integration<\/p>\n
Coordination and alignment vs domination and control<\/p>\n
Reconfiguration and renewal<\/p>\n
Culture (national and organizational)<\/p>\n
Identity<\/p>\n
Justice<\/p>\n
Trust<\/p>\n
Restructuring<\/p>\n
Changes to the set of businesses or structure within businesses<\/p>\n
Types<\/p>\n
Downsizing (internal changes)<\/p>\n
Downscoping (selling of businesses)<\/p>\n
Leverage buyouts (selling of businesses to a \u2018private\u2019 party)<\/p>\n
Performance<\/p>\n
Generally positive impact for parent firm (both for accounting and market based returns)<\/p>\n
BUT:<\/p>\n
Variance between types<\/p>\n
Strategic intent<\/p>\n
Relatedness (no effect)<\/p>\n
Resource value<\/p>\n
Low vs high performance divestitures<\/p>\n
Next week<\/p>\n
Cooperative strategy<\/p>\n
Required reading: Chapter 9<\/p>\n
Required reading: The rules of co-opetition<\/p>\n
Required reading: CASE 4: Pfizer<\/p>\n
Don\u2019t forget your preparation (poste one comment). <\/p>\n
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Trends in M&As Trends in M&As Trends in M&As Agenda Strategy assignment Trends Performance Motives Firm and environment characteristics Integration Strategy report Write a strategy report based on your analysis of either one of these companies: Air New Zealand, Fletcher Building, Fonterra, Spark, or The Warehouse Group. The analysis feeding into this report should effectively […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-97867","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/97867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=97867"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/97867\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=97867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=97867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=97867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}