Cover -- Creating Value from Mergers and Acquisitions The Challenges -- Contents -- Preface to the second edition -- Preface to the first edition -- Author's acknowledgements -- Publisher's acknowledgements -- Introduction -- Do mergers and acquisitions add or destroy shareholder value? -- The five-stage (5-S) model -- Stage 1: How good is the corporate strategy development process? -- Stage 2: How well does the company organize for acquisitions? -- Stage 3: What are the pitfalls in deal structuring and negotiation? -- Stage 4: Don't count the chickens yet! Post-acquisition integration -- Stage 5: How did the merger go? Post-acquisition audit and organizational learning -- Objectives of the book -- Outline of the book -- Notes and references -- Part One Historic, Conceptual and Performance Overview of Mergers and Acquisitions -- Historical overview of mergers and acquisitions activity -- Objectives -- Introduction -- The wave pattern of takeovers in the US -- Takeover activity in the European Union -- Historical overview of takeover activity in the UK -- Mergers in emerging markets -- Overview of the merger waves -- Why do merger waves happen? -- Rational economic models of merger waves -- Impact of industry changes on M & A activity -- Behavioural models of merger waves -- It's not all 'high buys low' -- 'low buys high' too -- Strategic implications of industry clustering of M & A -- Case Study: Pharmaceuticals suffer from the urge to merge -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Alternative perspectives on mergers -- Objectives -- Introduction -- The economic perspective on mergers -- Industry analysis of competition -- Game theory and competitive moves -- Strategy perspective on mergers -- Dynamic capabilities and mergers -- Corporate and business strategies.

Finance theory perspective on mergers32 -- Managerial perspective on mergers -- Organizational perspective on mergers -- Summary of the multiple perspectives on mergers -- Case Study: 'The Best a Man or a Woman Can Get' - P&G and Gillette bridge the gender gap in their brands! -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Are acquisitions successful? -- Objectives -- Introduction -- Defining success of mergers and acquisitions -- Measuring the impact of acquisitions on shareholder returns -- Review of stock market assessment of acquisition performance -- Results of empirical studies of merger impact on stock returns -- Assessing the operating performance of acquirers -- Overview of the operating performance studies -- Post-merger performance of alternative corporate strategies -- Mergers, managers and corporate governance -- Post-merger performance and M & A deal characteristics -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Appendix 4.1: Abnormal returns methodology to study the impact of mergers on shareholder value -- Appendix 4.2: Studies cited in Tables 4.1 to 4.9 -- Part Two Corporate strategy and organizing for acquisitions -- Sources and limits of value creation in horizontal and related mergers -- Objectives -- Introduction -- Motivations for horizontal mergers in mature industries -- Revenue enhancement through acquisition of complementors -- Cost savings as a source of value creation in acquisitions -- New growth opportunities as a source of value -- Resource-based view (RBV) of acquisitions and value creation -- Evidence of lack of sustainable competitive advantage -- Case Study: Heavy truckers trundle their way to market dominance -- Overview and implications for practice -- Review questions -- Further reading.

Notes and references -- Sources and limits of value creation in vertical mergers -- Objectives -- Introduction -- Vertical integration -- Benefits and costs of buying in markets -- Benefits and costs of long-term contracts -- Benefits and costs of vertical integration -- Vertical mergers and value creation -- Empirical evidence on vertical mergers and their value effects -- Vertical mergers that blur industry boundaries -- Outsourcing through acquisitions -- Case Study: Hospital, heal thyself -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Sources and limits of value creation in conglomerate acquisitions -- Objectives -- Introduction -- Pattern of conglomeration in different countries -- Why do firms diversify? -- Resource-based view of conglomerate acquisition -- Finance theory of conglomerate diversification -- Managerial perspective on conglomerate diversification -- Organizational perspective on conglomerate diversification -- Summary of alternative perspectives -- Review of empirical evidence on the value of conglomerate diversification -- Valuation of conglomerates in other countries -- Evidence on operating performance -- Is the internal capital market efficient? -- Case Study: Messier bets Vivendi on his grand vision and pushes it towards bankruptcy! -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Cross-border acquisitions -- Objectives -- Introduction -- Alternative overseas expansion strategies -- Recent trends in cross-border acquisitions -- Factors influencing cross-border mergers -- Why do corporations undertake cross-border acquisitions? -- Barriers to cross-border takeovers -- Valuation and financing of overseas acquisitions -- Post-acquisition integration -- Empirical and survey evidence on CBA performance.

Case Study: Cross-border acquisitions bring power to companies -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Strategic alliances as an alternative to mergers and acquisitions -- Objectives -- Introduction -- Types of strategic alliance -- International joint ventures -- Model of a joint venture -- Structuring a joint venture -- Performance evaluation of joint ventures -- Critical success factors in strategic alliances -- Choosing between an acquisition and an alliance -- Case Study: General Motors (GM) and Ford drive on different roads to same town -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Corporate divestiture -- Objectives -- Introduction -- Rationale for corporate divestitures -- Forms of corporate divestiture -- Corporate sell-offs -- Corporate spin-offs -- Equity carve-outs -- Stock market arithmetically challenged in pricing equity carve-outs? -- The downside of downsizing -- Tracking stock -- Overview of the divestiture methods -- Case Study: Marriott's bondholders taken for a spin (or for a ride?) -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Leveraged buyouts -- Objectives -- Introduction -- Leveraged buyout -- Organizational and legal structure of the private equity firm -- Types of LBO -- Overview of the LBO markets in the US and Europe -- Sources of LBO targets -- Exit from LBOs -- Characteristics of optimal LBO targets -- Organizing the buyout and role of the PE sponsor -- LBOs in major European countries -- Managerial motivations for an MBO -- LBO as a superior business organization -- Value creation performance of LBOs -- Future of the LBO market in the US and Europe -- Case Study: The tale of two stores: Safeway and Kroger.

Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Acquisition decision process: organizational, psychological and governance perspectives -- Objectives -- Introduction -- Acquisition decision-making process: organizational perspective -- Acquisition decision process: psychological perspective -- Narcissistic CEOs and acquisitions -- Imitative acquisitions: institutional theory perspective -- Acquisition decision-making process: compensation incentive perspective -- Acquisition decision-making process: governance structure impact -- Managing acquisition decision-making -- Survey evidence on the acquisition process -- Case Study: Deutsche Boerse CEO and Chairman pay with their jobs for lesson on shareholder activism! -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Target selection for acquisition -- Objectives -- Introduction -- Target selection process -- Strategic choices and acquisition -- Platform strategies -- Serial acquisitions -- Deal considerations -- Profiling desirable targets -- Due diligence -- Case Study: How Beecham approached its merger with SmithKline Beckman -- Overview and implications for practice -- Review questions -- Further reading -- Notes and references -- Part Three Deal structuring and negotiation -- Target valuation -- Objectives -- Introduction -- Sources of value in acquisitions -- Valuation models -- Estimating target equity value using the RI model -- Estimating target value using the PER model -- Enterprise value multiple -- Asset-based valuation -- Valuation using other multiples -- Discounted cash flow model -- Impact of tax on target valuation -- Real options framework for valuing targets -- Financial options and real options.

Case Study: 'They also lose who only stand and wait' - when option value is eroded by competition.

Creating Value from Mergers and Acquisitions is the first book to provide a comparative analysis of the M&A scene in Europe and the US, the two most active markets in the world. Now in its second edition it continues to develop an international and multidisciplinary perspective of M&A, and considers M&A as a process and not a mere transaction. The author draws upon economics, finance, strategy, law, organisational theories to formulate a five-stage model and emphasises the need to understand the interconnected nature of these stages. The book’s central focus in on the challenges to using M&A as an instrument to create shareholder value, how M&A risks can be mitigated and how odds of success in acquisitions can me increased. Creating Value from Mergers and Acquisitions is suitable for those studying advanced undergraduate and MBA courses in industrial organisations, finance, business strategy, and corporate governance, as well as those preparing for professional exams. The rigorous integration of the conceptual, empirical, and practical aspects of M&A means that researchers and practitioners will also find this book extremely useful.

Description based on publisher supplied metadata and other sources.

Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2019. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.