effect of mergers and acquisition on target companies
TRANSCRIPT
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NAME XXXXX XXXXXDEGREE BA (Hons) Accounting & Finance
TUTOR Andrew CoulsonTITLE the Effect of Mergers and Acquisition on Target CompaniesDATE March 2011CAMPUSE Newcastle
STUDENT No: 10028853Project submitted in partial fulfilmentOf the requirements of theBA (Hon) ACCOUNTING & FINANCEof Northumbria University
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DECLARATIONS
I declare the following:-
That the material contained in this Project is the end result of my own work
and that due acknowledgement has been given in the bibliography and
references to ALL sources be they printed, electronic or personal.
(1) The Word Count of this Project is: Section A: ___3621______
Section B: ____5215_____ Total Word Count: ___8836______
(2) That unless this Project has been confirmed as confidential, I agree to
an entire electronic copy or sections of the Project to being placed on
Blackboard, if deemed appropriate, to allow future students the
opportunity to see examples of past Projects. I understand that if
displayed on Blackboard it would be made available for no longer than
five years and that students would be able to print off copies or
download. The authorship would remain anonymous.
(3) I agree to my Project being submitted to a plagiarism detection service,
where it will be stored in a database and compared against work
submitted from this or any other School or from institutions using the
service.
In the event of the service detecting a high degree of similarity between
content within the service this will be reported back to my supervisor and
second maker, who may decide to undertake further investigation which
may ultimately lead to disciplinary actions, should instances of plagiarism
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be detected.
(4) I have read the University Policy Statement on Ethics in Research and
Consultancy and the Policy for Informed Consent in Research andConsultancy and I declare that ethical issues have been considered and
taken into account in this research.
SIGNED: ________________
DATE: __________________
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Abstract
This professional project is intended to link personal development and
professional career with four different psychometric questionnaires
supported to understand and improve myself effectively. Self analysis help
people find most suitable method to learning and working. Furthermore, the
achievement of academic and professional career is based on the self
awareness and development. After analyzing my personalities, an
academic piece of work about mergers and acquisition activities will beconducted to relate my personalities to future career and social demand.
The boom of mergers and acquisitions activities has become the hot issue
for the economy field, my academic work will analyze the activity sufficiently
and deeply.
Key words: self-development, career, mergers and acquisitions
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ACKNOWLEDGEMENTS
First of all, I would like to thank my parents. I cannot have the opportunity to
study further in the UK without their support.
Secondly, I really appreciate the suggestion and guidance received from
the Professional Project Tutor Andrew Coulson in the processing of my
dissertation.
Thirdly, I would like to thank all the lecturers and tutors in the Newcastle
business School of Northumbria University help me to learn the business
knowledge.
Finally, I would like to thank my best friend Yan, who makes every efforts to
help me whatever in my studying and my life.
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Table Contents
DECLARATIONS ......................................................................................................... IIAbstract ................................................................................................................... IVACKNOWLEDGEMENTS ............................................................................................ VTable Contents ........................................................................................................ VISection A .................................................................................................................. 1
Introduction ...................................................................................................... 11. Personal Learning Analysis ............................................................................ 2
2.1 VARK questionnaire .............................................................................. 22.2 Myers Briggs Test Results ..................................................................... 52.3 Honey and Mumford Learning Style Questionnaire ............................ 72.4 Belbin Inventory Test Results ............................................................... 8
3. Personal Career Development ...................................................................... 93.1 Lifelong Learning .................................................................................. 93.2 Transferable skills ............................................................................... 113.3 Career Choice ..................................................................................... 14
Section B ................................................................................................................ 15Part 1 introduction .......................................................................................... 15
1.1 Motives for the topic choice .............................................................. 151.2 overall objectives ............................................................................... 161.3 part outline ........................................................................................ 17
Part 2: Literature Review ................................................................................. 192.1 PEST Model of environment analysis of mergers and acquisitions ... 192.2 Merger Motives .................................................................................. 242.4 Post-acquisition effect on target companies ..................................... 34
3. Summary and Conclusions .......................................................................... 36Reference ........................................................................................................ 39
AppendicesReflective Statement
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Section A
Introduction
It is more acceptable that self analysis is the basic step of success for a
person in this modern society. The aim of self analysis is to find accurate
position in the society and to acquire correct outline of value. A successful
person is good at finding the merit of his own and taking advantage of it to
make the achievement. Establishing a clear target and implementing
sufficiently is important to everyones whole life. A Chinese famous
ideologist Lao Tzu argued that knowing yourself is enlightenment rather
than knowing others (2000). Only if knowing yourself all around can
develop yourself effectively. During the self analysis, the first step is that
you should understand the three questions: what kind of people y; what is
your long-life objective; what career is proper to you? After considering the
questions carefully, you will have clearer conception of your anticipant life.
Next step is more important, analyzing your strengths and weakness.
According to the history of successful person, they concentrate on learning
strongpoint from others to improve themselves constantly. You have to
exert your advantage and avoid the weakness as much as possible in the
career. After that, you should make every effort to seize the opportunities atall times and places. Finally, continuous self development is based on the
former steps. Only if knowing yourself sufficiently you can improve yourself
to achieve the objective persistently.
This project of self analysis will be divided two parts. The first part is
personal learning analysis. Four self analysis toolkits, which are VARK,
Myers Briggs, Honey and Mumford learning style questionnaire and Belbin
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Inventory, will help me to analysis myself more effectively. These test
results show my personalities, characteristics, strength and weakness; the
suggestion of the learning style and work I may be suitable. I will providemy memorable experience combining with the test results to improve
myself in learning and working. The second part is about my career choice.
I will discuss my major in the university and skills learning from my studying.
Then I will integrate the career choice with my personalities to make my
lifelong objective.
1. Personal Learning Analysis
2.1 VARK questionnaire
The first test I took was the VARK questionnaire, of which result highlight
your learning preference standing for visual, aural, read/write, kinesthetic
and multimodal. The test assess users own learning style and give them
helpful learning strategies what might mean for users educational and
career life. After completing the VARK questionnaire, users can easily know
about their preference study strategies and the results will give some
suggestion of knowledge intake and output. The VARK study preference is
important for users to find a more intelligent learning style to solve some
tasks easier. (Yousef, Alkhasawneh, Mrayyan, Alashram and Docherty,
2007)
Figure 2.1: VARK Questionnaire Results
Visual Aural Read/Write Kinesthetic
3 6 6 2
Source: www.vark-learn.com/english/result.asp
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My questionnaire results (figure 2.1) indicated that I have two strong
learning preferences, which are aural and read/write learning preference. In
terms of aural learners, who always focus on what teachers say in thelectures. Furthermore, this kind of learners easily absorbs information
through explaining new ideas to others, talking with friends, listening tapes,
discussing tasks with their teachers, attending lectures and using jokes and
stories. (Fleming, 2004) I would definitely agree with the results, having
always learnt most effectively in discussing topics with my friends. I can
easily seize the key points through listening to lectures or others opinions.
After class, I can apply the theory learnt from lectures into practice at once.
My friends al ways call me a quick learner. Moreover, I am confident and
pleased to delivering my ideas or explain some topics to the public. For
example, before examination, a lot of classmates always require me to
explain the chapter-end exercises. At that moment, I am very pleasure
teach these classmates who are still puzzle with the knowledge in certain
module. There are three reasons for me to do so. First of all, giving help to
others is my happiness resource. Secondly, I can build the close
relationship with my classmates. Thomas (2009) argues that we had better
connect to some important people, who will become a kind of treasure in
the future. The last and the most important reason is when I explaining
exercises to my classmates I review the knowledge efficiently. This
experience sufficiently support that I possess an aural learning preference.
In my opinion, my preference for aural learning style is linked to my family
environment. My parents are liberal to adopt my advices to my life, they
hard be strict to ask me do whatever I do not like to do. Therefore, I was
encouraged to speak my mind and have talk with my parents. I always get
important suggestion from my parents rich experience.
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My same strong learning preference is read/write. This kind of learner
prefers essays, reports, lists, definition, manuals, readings and taking notes.
(Thomas, 2007) I agree with the test result. I am easily attractive bycharacters. For example, I find that I will concentrate to the subtitles rather
than the pictures involuntarily when seeing a movie, which means I am
sensitive to the words. I prefer to read the teaching materials then write up
my notes after every lecture. This method being adopted from my junior
high school is benefit for me to review the knowledge learnt from the
lectures. Moreover, writing essays is a good way for me to study. When
writing an essay, collecting information cannot be avoided. Through reading
more professional books, journal articles and skimming web pages, the
knowledge is left a deep impression in my mind.
My preference for write/read learning style is influenced by the education of
my primary school. Teachers have stringent requirement for pupils to write
and read article. The punish way of our teacher is to write some paragraph
at least five times. This education drives me to become a read/write learner.
Aural and write/read learning preferences help me both in studying in the
school and my future career. Undoubtedly, my most parts of finance career
are reading finance reports, building Microsoft Excel models and analyzing
complex market prices. It is obvious that write/read learning skill becomemy competitive advantage comparing to other co-workers. However, aural
skill helps me to learn new concept of experienced colleagues. Moreover, I
can catch the key point of information when having meeting with manager.
Then I can take action improve my work effectively. Otherwise, developing
my visual and kinaesthetic skills cannot be ignored. Improving abilities all
around will benefit to my future.
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Therefore, I strong believe that VARK questionnaire results reflect my
preference learning skill. I should take advantage of my strong learning
preference to improve my study and future career. Meanwhile, developingthe weakness skills is also important for me.
2.2 Myers Briggs Test Results
The second test I took was Myers Briggs, which is a personality analysis
model being based on four preferences: Extraversion or Introversion;Sensing or iNtuition; Thinking or Feeling; Judgment or Perception. After
completing MBTI (Myers Briggs Type Indicator) users will have clear
version of career choice, people influence and leadership skill development.
My highest scoring type is ENFJ. The first letter E is defined that I prefer to
direct my energy to deal with outer environment such as people, things and
situations. Therefore, my preference is for Extraversion. The second letter
N highlight that I prefer to deal with unknown or unobvious ideas to create
new possibilities when processing information. This personality I possess
called intuition. The third letter F indicates that I prefer to decide using my
beliefs rather than objective logic. Then my preference in making decisions
is for Feeling. The last letter J demonstrates that I prefer my life to be
planned, stabled and organised then my preference is for Judging. (Myers
and Myers, 1995)
According to the ENFJ description (Appendix A), what I am really concern is
to build harmony personal relationship. Whenever making decisions or
expressing my opinions, I usually consider other peoples feeling first.
Hogan (2006) argues it is important for people to build and maintain the
relationship with different people; even they differ from gender, age or
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ethnicity. I would agree with the results. I cannot be isolated from others in
my daily life, because the harmony relationship with families, friends,
colleagues and classmates bring me not only happiness but benefits:instrumental suggestion and emotional support. (Connie, Jean and Jane,
2000) In terms of the instrumental suggestion, families, friends, classmates
and so on will help me to solve some tough problems and give effective
suggestion when I faced with challenges. Moreover, they always share
important information without reservation, sometimes this information might
become an opportunity for me. The example happened last year. A friend of
mine worked in an international company recommend me to have an
interview of his companys intern. Thanks to his recommendation I get the
intern position in the sales department of that international company. During
my internship, I learnt about more practice experience from my daily work
and suggestion from co-workers. This is high return from the harmony
relationship. Besides that, harmony relationship brings me emotional
support. When we finish close relationship with our better half or lose a
family member, we want to talk with friends and families to release our
bitterness. They will give us emotional support. If we do not have many
people around us and we are feeling lonely. Nobody can be found to rely on
for emotional support. Furthermore, my personality of seeking harmony
relationship makes me to be a participative style leader, who achieve
through co-workers. I adopt ideas from team members and let them feelvalued as an integral part of the team. I will make decision from
communicating with co-workers rather than authoritarian. (Daniel, 2000)
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2.3 Honey and Mumford Learning Style Questionnaire
The third test I took is Honey and Mumford learning style questionnaire,which is designed to find out peoples preferred learning styles and to make
them to learn more efficiently. My test result is strong preference for activist.
Activists are enthusiastic about any new experience. They tend to thrive on
the challenge of new experience but feel bored with implementation and
complex process. Learners who have a preference for the activities style
will learn best from new challenges, competitive teamwork and ideas
generation. (Honey and Mumford, 1986) I would agree with the result that I
am full of curiosity to anything new but lose passion gradually in
implementing process afterward. An example in my real study supports the
result of Honey and Mumford learning style questionnaire sufficiently. When
I learnt the topic of Credit Crunch in the international finance module, I felt a
little bit boring of this issue discussed again and again last several years.
However, our lecturer used a totally different method to explain the root of
Credit Crunch. He drew a bottle of champagne on the blackboard referring
to the mortgage; pyramid class representing the different level risky
securities. I was attractive by the new visual explanation of Credit Crunch
and felt more interested in this topic. According to the result of
questionnaire, I also find some weakness that easy to lose my
concentration after initial passion on the project, which might make troubleto people surrounding me. I should mend the weakness to improve myself
in the future.
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2.4 Belbin Inventory Test Results
The last test I applied was Belbin Inventory, of which results show theself-perception team role. According to the results (Appendix A), my
preferred roles is resource investigator. This kind of people is enthusiastic
to pursue contacts and explore opportunities, who will give the whole team
a rush of enthusiasm at the start of the project. Due to the personality of
extroverts and communicative, they are quite appropriate to focus on
outside work. However, the weakness will appear towards the end of a
project, they will lose momentum and forget small details. (Belbin, 2003)
I totally agree with the test results. When participated group work in the
seminar, I was a team leader in charge of the tasks distribution. At first, I
was activity to email team members to have discussion of our presentation
and provided new ideas to help our group broaden the version and found
more angles to analyze the tasks. I prefer to discuss my own ideas to the
group members in the meeting of group working rather than implement the
task in practice. Due to my good relationship with others, mentioned at
previous test (Myers Briggs), I can easily collect useful information from
classmates, which is especially useful at the development bottleneck within
our team. Communicating, contacting and negotiating with others are my
strength, which help me build relationship and get good comments from mygroup member. However, the weakness cannot be ignored that I lose my
interesting on the task gradually. I have not patient enough to concentrate
myself on the following stages after the brainstorming. Furthermore, team
cooperation becomes more important with the diversification of knowledge
in variety fields. Every person has their own characteristic; the roles played
on team had better be distributed based on the variety advantages team
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members possess. As a university student, I cannot deal with the complex
problems by myself; sometimes, team members discussion might enlighten
me and help me to complete tasks. (Frederick, Matthew and Michael, 2005)Every team members contribution will directly affect the team performance.
Therefore, I should try my best to conquer my weakness to make our team
perform better.
3. Personal Career Development
3.1 Lifelong Learning
Lifelong learning encompasses careers skills and personalities
developments aimed at flexibility of employability and personal
achievement. (European Commission 2001) In order to keep pace with the
increasingly knowledge-based modern society, it is more important for us to
learn new knowledge and technology without stopping. Learning is a
lifelong process, which has become a life pan target for people in the future
life and make learners to fulfil their achievement in careers. The aim of
lifelong learning is to develop ourselves to improve employment prospect
as well as the professional business skills to survive in the dramatically
competitive global economy. Lifelong learning is a relatively lasting
modification of behaviour based on the experience. (Birren, 1964) we will
be faced with variety challenges when working in the company. Some of all
arise from the knowledge shortage. At this situation, we choose to study
further about our work at spare time. Some are resulted from the weakness
of personality, which is difficult for us to overcome. We must concentrate on
the positive attitudes to the co-workers and tasks, developing outlook of
ourselves for skills and creativity.
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Houle (1961) argue that learning for every person received from two
education, the first is from our teachers; the second, more important, is
from ourselves in the workplace. In my opinion, university educationteaches me a lot of academic knowledge and handles professional skill of
my major. Besides that, I have learnt how to learn myself, which will help
me to continuous to learn independently after graduation. In terms of my
professional skill, independent learning becomes an important issue for my
lifelong learning. Only if I can study by myself that my lifelong learning will
be continued. For example of my professional skill learning, I focus on
learning the accountant knowledge. I have passed twelve subjects of AIA
(The Association of International Accountant) certificate, and I am trying my
best to reach the professional level of accounting. Because of the speedy
change of financial world, international accounting standards are often
revised, which will drive me to learn more and more. This certificate will
help my career and make me do more professional than other co-workers.
Therefore, the professional skill becomes my lifelong learning. After
graduation from the university, accounting information should be learnt by
myself. I should identify what I need, make realisable learning plan, find
appropriate resources to meet my demands and evaluate progress to the
learning goal. My achievement in accounting field will be the best reward for
my persistence
Regarding to the personality, overcoming my personality weakness is
another kind of lifelong learning. According to the previous questioners, my
weakness can be concluded as: easy to lose initial passion after complex
process of one project; feel bored with implementation and longer term
consolidation; dare to try new things. These might have a negative impact
on my future career. Co-workers might uncomfortable when I am around,
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because I cannot insist on the project throughout the overall process and
only have interesting on the fresh things. I must learn how to be patient to
take part in every step of project and make every effort to complete themsuccessfully. Therefore, overcoming my personality weakness becomes
another task of lifelong learning. Otherwise, my weakness will be obstacle
of my future career and life.
3.2 Transferable skills
Transferable skills are defined an ability to transfer a range of graduate
subject study to the workplaces and outside based on the real work
experience. (Fallows and Steven, 2000) The transferable skills can be
divided into more specific skills: communication skill, analytical skill,
teamwork skill, leadership and information technology.
Communication skill plays an important role in the success on my job,
which includes two aspects of oral and writing. Maupin (1993) argue that
the communication skills an d competencies are highly demanded in todays
team-oriented, service-oriented, and decentralized business environment.
When I make presentation to large or small groups, the information and my
opinion should be expressed clearly and efficiently. My speech should be
confidence and easy to understand by co-workers. However, negotiation
with customers is good opportunities to show my ability of communication.
A good employer can persuade customers to adopt my ideas and make
contracts with my company. The writing skill is important when writing
performance reports, records, specialized documents and correspondence.
These reports or documents should in a cogent manner and formal format,
because they are read by managers. A good report expresses my clear
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logic and opinion on my task and well-organized performance in workplace.
Therefore, communication skill should be attached importance; it will direct
express my good ability in my work to co-workers and managers.
Analytical skill combines with technique of intellectual inquiry and
professional knowledge. (Donald and Mary, 1987) My job might relate to the
financial analysis, I must have the ability to analyze the complex and
changeable financial world independence or group research based on the
obtained information and standard financial reports. My financial work
cannot be on the shallow level of conclusion the information be collected,
but concentrating on the process of information analyzing with my
professional accounting and finance knowledge. Analytical skill also will
help me when I am faced with hard projects. I am calm to find corn problem
and divide the project into several different process according to the order
of priority. Then, I can solve it step by step.
We cannot be isolated with others in our life, and the skill of teamwork plays
an important role in the relationship of co- workers. In todays economy
society, more and more issues cannot be finished individually; the
complicated tasks should be taken by teams. Procter and Currie (2004)
argue that teamwork is regarded as the important facilitators in achieving
effective and positive outcomes in different companies settings.
Establishing working relationship with team members is first step. Sharingand delegating responsibilities within the group should be based on the
good relationship with co-workers. Thus, team works go with a swing.
According to the results of Belbin test, my preferred role in team is resource
investigator. Every member takes their responsibilities of tasks based on
the considering of their different characteristics, which will make our team
work to be carried out efficiently.
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Effective leaders are highly demanded in complex business companies,
who make whole company running in good structure and employees
working under efficient management. Group works in the university built myleadership through distributing tasks to different style team members,
communicating with others, which help me build my leadership style in my
future career. A good leader is directly related to the company success,
because leader plays the role in motivating and inspiring employees to work
hard towards the targets. Pincus and DeBonis (2004) contended that
leadership strengthen human relationship by rust and understanding.
Therefore, a good leader will be flexible to adapt changes based upon the
difference situational factors; trust and encourage employees finish tasks;
be fair to every person based on their rewording. The leadership I possess
make me easy to communicate with co-workers and attract them follow my
idea to carry out certain project. The outstanding skill makes me have more
opportunities to gain the promotion.
Information technology is absolutely necessary for modern office work. All
kinds work should be recorded into computers, like sending E-mails;
entering data Information technology is the essential skill for office
employees, especially to the financial employees. Finance is a kind of work
to analyze different data emerging from difference economic system such
as stock exchange markets, company annual reports, banks and so on. Allthese data should be recorded and process in the computers. To a financial
employee, Windows Excel software should handle masterly.
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3.3 Career Choice
Within the increasing competitive, sophisticated, technical andcompartmentalized world of occupation and word (Herr, 2003), professional
skills help me to win the high rewarding jobs easier than others. Moreover,
the motivation of my career is to establish the social status and to fulfill my
achievement. It is no doubt that outstanding career life can fully express my
own value to the society.
Finding a suitable job is the essential issue for my career life. Regard to my
professional accounting skill (AIA certificate) and my major in Northumbria
University (Accounting and finance), working in the financial field is my first
choice. According to Myers Briggs test (Appendix A) I am good at
establishing relationship with others and easily keep the harmony within my
relationship. Some jobs of communicating with customers can take
advantage my personality. Therefore, financial consulter or customers
manager might be suitable for me. I can give my customers my professional
advices to help them make fund administration, business investment or tax
evasion in reason. An ideal job should combine my professional knowledge
with benefits of my characteristics.
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Section B
Part 1 introduction
1.1 Motives for the topic choice
The increasingly number and scale of mergers and acquisitions (M&As) are
taking place in countries throughout the world. It cannot be denied that
mergers and acquisitions have become one of the most important
corporate-level activities in the new millennium. (Hitt, Harrison and Duane
Ireland, 2001) The boom of mergers and acquisitions is resulted from high
profitability and liquidity of acquired company, whose manager become
over-confident throughout some good financial condition years, internal
growth cannot satisfy the company development demand, managers
decide to amplify the company through acquisition. Each twist or move of
the mergers and acquisitions activity can affect the performances both
acquirer firms and target firms. The bid battle attract a great deal of
attention from shareholders, employees even the local governments, which
make decisive effect on creation shareholders value, transfer of personnel
and so on. Because of the importance of mergers and acquisitions activities
to company growth and success in the trend of economy globalization, the
topic is worthwhile to be researched and analyzed. However, the strategiesof Target Company directly decide the characteristic of bid, whether is
friendly or hostile. Target Company plays initiative in mergers and
acquisitions activity. After taking into account the company strategy and
performance, the managers of target firm will take action to resist a bid for
the company. Therefore, my concentration of mergers and acquisition
research is on the effect on the target company.
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1.2 overall objectives
Mergers and acquisitions are undertaken by companies to achieve
company objective and strategy. The hot trend of M&As activities is the
widespread perception that acquiring other companies accelerate the
development speed of becoming multinational and extend the scale of the
acquirer company. It seems a shortcut to entry new foreign market to avoid
the entrance barriers and different culture cross. Furthermore, a successfulM&A activity can reinforce the competitive strength. However, mergers and
acquisitions have complex process and take large amount of money and
long period time to negotiate with target company, the results are always
dissatisfied that M&A activities do not create value for shareholders and in
fact loss a lot. (Hagedoorn and Duysters, 2002) The strategy of mergers
and acquisitions implemented within the company is high risky to face huge
amounts loss. On the other hand, challenges mean both opportunities and
threats. In some case, establishing a multinational organization has
become the core strategy and achievement for managers and shareholders.
It is inevitable that mergers and acquisitions is an important issue to
analyze.
In terms of the target company, some of which are faced with bankruptcy
are willing to be taken over by a financially sound organization to get them
out of trouble. Particularly suffered from the subprime crisis in 2007, a lot of
influential organizations announced collapse. It seems a good opportunity
for mergers and acquisitions. However, recovering from the recession for
the target company will face the revolution from the restructure of the
company to the change of the strategy. The effect of the M&A activity on
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them will attract concerns from shareholders, employees, economists. The
effect of M&A activity on the target company is dramatically. Therefore, the
central topic of this professional project concerns the possible effect thatmergers and acquisitions bring on the performance of target company. This
project regards mergers and acquisitions as a process rather than as a
transaction. Different stages make various effects on the target company.
Post acquisition period can be described as bid battle of acquiring company
and acquired company. The information of M&A activities process directly
related to the change of stock market. It is a proper time to create
shareholders value for the target firm. If the deal is agreed, restructuration
of the combined company will lead to the transfer of personnel. The
strategy and culture of the target firm will change a lot. This project is to
analyze the effect of on the target company on the different stage of
mergers and acquisitions. First of all, economic environment analysis
regarding what kind of environmental factors encourage more and more or
organization choose the M&A strategy to extend their scale. Secondly, find
different motivations for M&A activities. Thirdly, different model to valuate
the target company can be used. Fourthly, the effect of post acquisition
period will be analyzed. Fifthly, the effect of after integration on target firm
will be investigated. Lastly, summary and conclusions presents a synopsis
of the results based on the analysis.
1.3 part outline
Part 1: introduction
This part of the project outlines the inspiration for undertaking the chosen
topic and the project objectives for the investigation.
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Part 2: literature review
This part provides all academic information and essential knowledge about
the topic of the project. It critically reviews and analyzes the theories andpractices of Mergers and acquisitions. This includes a wide range of
definitions and sources to support project.
Part 3: summary and conclusions
The third part presents a synopsis of the results of the analysis based on
the previous literature review.
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Part 2: Literature Review
2.1 PEST Model of environment analysis of mergers and
acquisitions
Gort (1969) argued that mergers wave always happen when an increase in
general economic activity creates disturbance of the market. As the
economic disturbance theory indicated that mergers and acquisitions were
expected to boom to stimulate growth after the subprime crisis happened in
the year of 2007. While, the recession takes the major responsibility of the
mergers wave, the boom of mergers and acquisitions recently may both be
subject to wider influences. Therefore, the PEST model analysis helps
people to realize the economic environment of mergers and acquisitions
more objective.
2.11 Political factors
PEST model of the environment is made up of Political, Economic, Social
and Technical (PETS) dimensions. Political factors make direct effect on the
M&As activities. Regulations issued by government affect the decisions of
corporate managers. For example, after the housing bubble burst in US
2007, the high risk subprime mortgage made a domino effect on the global
economy. With the collapse of a lot of famous investment bank,
multinational organizations even the county like Iceland were faced with the
tough situation of bankruptcy. In order to copper with the financial crisis,
variety procedures were issued by government. The political pressure is
required to make the standing financial institutions to respond to changes in
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banking markets and recessionary pressure. Therefore, US government
officers arranged for mergers of failing banks with more or less rules
adjustments to the Federal funds rate1. The action is quickly followed by a
variety of policy innovation in 2008 to achieve the organization
consolidation. The revised regulatory encouraged the assets purchasing in
opening market and Federal Reserve would provide low rate short term
loans to acquirer companies. (Congleton, 2008) The changes of political
provide the impetus for mergers and acquisitions. A larger number of
managers seize the opportunity to reinforce their corporations.
2.12 Economic factors
Regarding to the economic factors, the fluctuation of foreign currency
exchange-rate should be taken into account for the mergers wave. Due to
the global recession, some sound and stable currency rates depreciate a lot.For example the sterling and US dollar exchange rate. According to Figure
2.1, pound/dollar rate was stable, fluctuated about $2 from the year of 2007
to the first half year of 2008. However, the subprime loan crisis hit the US
economy, and the effect spread to the UK. With the financial crisis
worsening, the pressure on the pound ongoing depreciated from the
second half year of 2008. The financial uncertainties saw the rate dropped
dramatically from $2 to $1.41 the closing value on January 2009. The
currency collapse and exchange rate depreciation make foreign investment
more profitable. (Aminian Campart and Pfister, 2004) The purchasing
power increased with the depreciation of the US dollar and pound for other
countries whose currency rates are still sound. It is a good opportunity to
1 In the United States, the Federal funds rate is the interest rate at which private depository institutions lendbalances at the Federal Reserve to other depository institutions, usually overnight.
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carry out M&As activities. Gonzalez (1998) argues that imperfect capital
markets actually encourage the mergers and acquisitions that lead to
undervalue the target firms assets. Therefore, the global mergers wave isaffected by the economical factors of dramatic depreciation of foreign
currency exchange rate.
Figure 2.12
(Source: http://www.miketodd.net/encyc/dollhist-graph3.htm )
2.13 Social factors
The social confidence influences the decision of corporate managers and
investors. (Nofsinger, 2003) Great deals of optimistical investors think the
tough financial condition will recover gradually; they catch the opportunity to
invest foreign countries due to the depreciation of US dollar and pound.
Interaction with others influences the social confidence, so more investors
follow the trend to acquire other firms lead to the economy come out of the
phenomenon of recovery. Furthermore, the open market and mature
financial standard help the extent of economy globalization. It is more
acceptable that core strategy of organization is to become multinational.
http://www.miketodd.net/encyc/dollhist-graph3.htmhttp://www.miketodd.net/encyc/dollhist-graph3.htmhttp://www.miketodd.net/encyc/dollhist-graph3.htmhttp://www.miketodd.net/encyc/dollhist-graph3.htm -
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The efficient way to accelerate the multinational development is mergers
and acquisition. Successful entry to other counties can enforce the
competition compared to the important rivals. However, the governments inthe Third World published preferential policies to attract foreign direct
investment of developed countries. Therefore, the global trend, high
competitive environment and open market encourage big organization
carry out the strategy of mergers and acquisitions.
2.14 Technical factors
Hagedoorn and Duysters (2002) argue that the core technology provides
the impetus for a number of mergers and acquisitions. Technology updates
faster ever than before in the new century, grasping a certain core
sophisticate technology means creating profitability. The information
technology industry is a typical example to improve the assumption. Googleis the most popular search engine in the world. According to the figure 2.14,
because of its high market share, great deals of sponsors advertise on the
Google site. The high advertisement revenue attracts a lot of competitors
decide to entry the search market, like Microsoft. However, the searching
market is a new field to Microsoft that has not the core search technology,
the efficient way to enter the search market is to acquire other company
that handle the technology. Microsoft chooses Yahoo! as target firm. After
the bid battle, the new company called Microhoo search was established to
beat Google search engine. Therefore, the high technology can eventually
lead to improve profitability of company. The technical breakthroughs
encourage the M&As activities.
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Figure 2.14(1): search market share in UK
Figure 2.14(2): search market share in US
(Source: http://www.search-engine-market-share.com/ )
http://www.search-engine-market-share.com/http://www.search-engine-market-share.com/http://www.search-engine-market-share.com/http://www.search-engine-market-share.com/ -
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2.2 Merger Motives
The trend of economic globalization gives organizations great opportunityto expand business. Organizations decide to mergers with other firms for a
variety of motives, which can be divided into 4 parts: synergy, bargain
buying, managerial motives and third party motives. (Arnold, 2008)
2.21 Synergy.
Mukherjee, Kiymas and Baker (2004) argue that the primary reason for
mergers and acquisitions is to achieve operating synergies. Sirower (1997)
defines synergy is to reinforce the competitiveness and increase the cash
flows what the two companies are expected to accomplish independently.
The managers of acquirer companies believe that the new combined
company will have a greater value than the sum of individuals.
Underwriters fees, advisers fees, public relationship bills, stock exchange
fees and accounting fees can be reduced after merger. For example, if a
company decide to enter a particular market but lacks of the right know-how,
the efficient method is to purchase an existing firm in that geographical
market. The target company may have the famous brand in domestic
market. Once acquiring the company, the new combined company reduce
the advertisement cost to increase its name reorganization. A successful
M&A activity is based on the win -win formula; the acquiree company also
create incremental value. Due to the lack of advanced skills and enough
money to produce its products on a large scale, the merger will bring
cutting-edge technology from acquire company. Thus, the two companies
create more value together than apart because each gains something it
does not already have.
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2.22 Bargain buying
Arnold (2008) argue that an acquiring company has a management teamwith superior ability, either at running a targets operation, or identifying
undervalued company which can be bought at bargain prices. The
inefficient management do not make effort on maximizing shareholders
value but focus on their own interests. Such a firm might be valued low of
the stock price in the stock exchange market because the management do
not consider the good stock market image is important to them. Investors
will not interested in such kind of firms. However, the talented managers in
acquiring company have the ability to estimate the stock price is
undervalued of the target company. In this situation, the acquiring firm is
sensitive to go beyond the general public. It will acquaint with the product
markets of the target firm in order to value the target firm more accurately
than other investors. Therefore, the acquiring company that have the
superior ability can acquire company at bargain prices.
2.23 Managerial motives
The reason for mergers is to satisfy managers own benefit. If the business
performance of the company is satisfied and revenue increased every year,
the managers will feel rather pleased with themselves. Due to the good
financial condition of the company, the managers want more control power
to the company rather than pay more dividends to shareholders. At this
situation, they become over-confident with their decision and over-optimism
in evaluating merger opportunities due to excessive pride or faith in their
own abilities. They do not learn from failure evidence and convince that
they are talented to find the undervalued firms when others cannot. The
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phenomenon is called hubris spelt out by Roll (1986) Furthermore, when
the mergers and acquisitions is successful, the managers should take more
responsibility of the larger combined company, which means the managersshould be paid more than before and their pension should be enhanced.
Not only the higher salary but the high social stature they will have due to
the larger scale company and large number of employees under their
control. (Zhao, 2006) Therefore, the managerial motives impel M&As
activities.
2.24 Third party motives
The third party may involve in the mergers and acquisitions. For example of
customers comes from Dranove and Shanley (1995), the customers would
prefer the company with standardised, high quality and good service.
However, small companies cannot meet the demand of the customers, thenthe managers adopt M&As strategy to enlarge the company scale. This is a
customer reaction become a benefit motives of mergers several companies.
Like vehicle industry, customers prefer purchase the complete unit instead
of buying in small mechanical parts from dozens of suppliers. The
component companies are driven to mergers with other company to
produce complete unit to satisfy the customers need.
Professional advisors also can be included in the third part motives.
Advisors give professional suggestion should charge high fees in the M&As
activities. For example, accountant will assess the target value for the
acquiring companies; lawyers will study the mergers regulations and
monopoly references. These professional individuals will get much benefit
from mergers event. Therefore, managers of some companies will be
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encouraged to acquire other companies after consulting them.
2.3 Pre-acquisition Process of target companies
Mergers and acquisition is a complicated process and requires much workby many people. Before providing offer to target firms, the acquiring
companies are required to prepare the action thoughtfully of target
valuation, diligent planning and appropriate financing. (Hitt, Harrison and
Duane Ireland, 2001) However, these actions are not enough for the
successful acquisitions, because whether target firms cooperate with
acquiring firms is the important issue. Therefore, managers of companies
which become the targets of bid should consider whether to accept the offer
on a friendly basis or reject them and regard them as hostile bidder.
Schnitzer (1996) argue that friendly bidders mean a situation in which the
top executives accept the offer and are willing to cooperate with acquiring
firms during the acquisition process. Hostile bidders can be defined when
the top executives of target firm reject the bidder and are unwilling to agree
to a merger and acquisition. But the acquiring company continue to pursue
it. The cooperation attitudes of target firms make the bidder to be friendly or
hostile. Different characteristics of the offered bidder make different effect
on the target firms.
2.31 The effect of friendly bidders on target companies
The board of directors of a target company accept the buyout offer from an
acquiring firm resulting from the high price per share is satisfied their
demand and benefit the development of the target company. According to
the selfishly interest of managers in target companies, the managers might
be promised to gain a better deal than before. The target management
might be provided an acceptable degree of autonomy or allowed to keep
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their power and perks to rewarding their recommendation of the bid to the
target shareholders. In terms of the target companies development,
acquiring companies can lead the business of target companies to a higher level. (Sudarsanam, 2003) These kind of friendly bidders usually take place
in the small company acquired by the great organization. The organization
has enough finance support to carry out the acquisition. The salary and
pension of managers in target company will increase after integration
though the control power is eliminated; the share price will increase on the
day of acquisition announcement which will induce shareholders to sell the
shares of target company to make more profit. (Morck, Shleifer and Vishny,
1988)The mangers and shareholders are satisfying the merger offer due to
the high rewarding for them. Therefore, the bidder is defined as a friendly
bidder. If the shareholders of target company accept the offer, they will not
spend a large amount of money and time in hiring professional advisors to
counter the bidders. A friendly bidder led to faster and easier integration of
two companies and achieves high profitability and synergy. IBERDROLA
acquired Energy East is an example of friendly bidder. IBERDROLA is an
international energ y group, which has the worlds top wind power producer
and one of the largest utilities internationally. Energy East Corporation is
involved in exploring, production, refining and marketing of oil and gas.
(Datamonitor, 2004) As foreseen, each Energy East share value increased
to $28.50 on the day of acquisition announcement 25 June 2007. Thisrepresents a premium of 20.2% over the average share price for the 30
days prior to the offer announcement. The acquisition creates value for
shareholders of target company. Furthermore, as a result of the acquisition,
Energy east diversify the business field both geographically and
operationally, as well as the source of revenue become more than before,
which is benefit to the development of target company bring from the
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acquisition. Friendly bidder create win-win situation for both company, not
only shareholders but the target company get profound benefit of
acquisitions.
2.31 The effect of hostile bidders on target companies
For different motives for target companies, the managers might decide to
resist the bids. Managers might fully believe that keeping independence
from the acquiring company is the best way to maximize the value for their
shareholders, employees even the local communities. Sudarsanam (2003)
provided another motive that managers regard rejection as a tactic to
extract the maximum bid premium from the bidder for the value creation of
the shareholders. Or the managers are afraid of losing their authority, social
status, control power and prestige of their jobs after acquisition successfully.
Therefore, the managers of target companies should adopt effectivestrategies to make success in the bid battles.
2.32 Strategic anti-takeover defences of target companies
Poison Pills : a poison pill is a highly effective strategy to defence against
the hostile bid, which can be adopted by a board of directors withoutshareholders permit. There are two types of poison pills: Flip-in allows exiting rights holders (except the acquire) to purchase the
shares in the target company at a discount. At this situation, the shares held
by acquiring company will be diluted, which make the M&As activity more
expensive and more difficult. Flip-over allow shareholders to buy the acquirers shares at a
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discounted price after the mergers, which lead to the increase of
acquiring bid price and possibly the control of the firm in jeopardy.
(Kahan,2002)
Yahoo! is a good example of swallowing the prison pill when counter with
the bid battle with Microsoft. The offer of $33 per share cannot be accept by
Yahoo!, they choose to swallow the prison pill. The employee severance
plan can be regarded as the poison pill to defence against Microsoft. The
plan stated that employees of yahoo laid off within a year after the
acquisition. Yahoo would be eligible for severance, which would be reduced
from the original provision last two years. The plan also stated that the
election of a new board of directors is not considered a change in
ownership, nor is the sale of the company's search business. Yahoo!
announced that the settlement is in favour of maximizing shareholders
value and the interest of company to avoid distracting litigation. (Steve,
2008)
Corporate charter amendments : Corporate charter amendments are
used to defend against hostile takeover, which make the transfer of power
control of target companies more difficult. These antitakeover amendments
have carried out in various esoteric forms, which typically involve: Most majority voting provision states that over 75% shareholders of
target company is required to permit M&As activity with interested party. Provisions dictating temporally staggered terms for directors which
benefits target company to delay the effective transfer of control until
several years after a supermajority of voting shares are acquired.
(DeAngelo and Rice, 1983)
This method was explained by Grossman (1980) that the antitakeover
provisions is a part of shareholders response of target companies to a free
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rider problem linked to the tender bids, which is aim to make the control
transfer ineffective.
Financial restructuring : The aim of financial restructuring is to increase
firm value through restructuring a large range of managerial strategies.
Financial restructuring is primarily to red uce the size of a firms assets base
or to change the debt or equity of a firm. This method can be regarded as a
pure going-private transaction, in which the management of target
companies hold the equity stake to avoid hostile takeover from acquiring
companies. Following a going-private transaction, target firms choose to go
public again. (Rao, 1994)
Golden parachute : Golden parachute refers to an agreement between a
company and its executive employee, state that they will be provided extra
payments if employment is terminated like the change of ownership or
acquired by other organizations. Golden parachute is an effective strategy
to defend against the hostile bid, which can increased the acquiring cost to
the acquiring company. However, the strategy might induce the executive
management of target companies to the acquiring companies at very low
price due to the high payment according to the agreement. (Sebehela,
2010)
2.33 Stock price of target companies reaction to acquisition
announcements
Many empirical studies indicate that the share price of target company will
increase surrounding the period of a takeover is announced whatever the
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takeover is successful or failure. (Croci, 2005) In most cases, mergers and
acquisitions can create abnormal value for the shareholders of target
company. Cumulative abnormal shareholder returns, the differencebetween the expected return for the shareholders and actual return comes
from the mergers and acquisitions announcement, reflect the expected
value resulting from the synergy. Flugt (2009) declare that the target firm
will receive the statistically significant cumulative abnormal returns are on
average 14.92% in a five-day window surrounding the period of
announcement day. According to the study result of mergers and
acquisitions happened in US in the period 1975-1999, Schwert (1996)
found the abnormal return to shareholders of target firms increased by
10.1%. Jarrel and Poulsen (1989) found that the target equal to 28.99 after
researching a sample of 526 takover transactions of US in the period of
1963 to 1986, whereas Frank and Harris observation of a sample of 1989
UK target companies whose abnormal return increase 23.3% in the period
of 1955 to 1985. More recently, a similar pattern is studies by Goergen and
Renneboog (2004), they reported that the shareholders abnormal return
9.01%. These professional studies summarized that the stock prices of
target companies increase significantly ranging from approximate 9% to 25%
around the mergers and acquisitions announcement. Thus, based on the
previous studies and findings, mergers and acquisitions announcements
would lead to significant abnormal returns to shareholders of target firms.
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Figure 2.33 Short Term Studies of Abnormal Returns:
(Source: Creating Value from Mergers and Acquisitions pp.74)
Figure 2.33 presents the summary results of some of the major studies of
short-term performance following acquisition of control in target firms. The
shareholders abnormal return increase sign ificant around the
announcement, the dramatic growth of target share price is the market
direct reaction for the mergers and acquisitions information; the high share
price of the target company resulted from the acquisition information
release, which attract public concern about invest the target company, for
the high expectation for the target company no matter the management
accept the bid or not. Asquith and Kim (1982), investigating conglomerate
mergers, found that the shareholders of target firms earn significantly
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abnormal positive returns around the announcement period irrespective
whether the acquisition is a merger or tender. Therefore, the period around
the acquisition announcement is a good opportunity to create shareholdersvalue of shareholders because the high public attraction.
2.4 Post-acquisition effect on target companies
After the complicated acquisition deal has been closed, a new process of
company restructure, job realization, strategy renews and value creationstarts. Cartwright and Cooper (1996) argue that mergers and acquisitions
stress is created by uncertainty and fear of the unknown rather than the
change. Integration of two organizations is not so simply process as to
restructure the combined company and establish a new hierarchy of
authority. It also includes the integration of company culture, employees,
core strategies and other process and system. Different patterns of the
post-acquisition integration carried on the target companies will be
analyzed separately.
2.41 company cultural perspectives
Both acquired and acquiring companies has their different culture and theculture of the company is embodied in its beliefs, values, ideologies and
rituals. (Sudarsanam, 2003) The unique company culture can be regarded
as motives for the employees to performance efficiently and effectively and
the value resource to push them fulfils their achievement in the company.
Different culture compatibility between acquired and acquiring companies is
an important task to copper with, especially in the cross-border acquisition
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integration. Countries quite differ in terms of their culture. Different
countries have different language and manner. Cross-border acquisition
integration should respect other countries culture, otherwise poor culture fitor incompatibility is likely lead to culture conflicts, polarization, negative
evaluation of counterparts and unsatisfied atmosphere in combined
organization. The culture of target firms is driven to change to face with the
new integration organization, particular to the smaller target companies are
likely to cooperate with the culture of acquiring companies. The
organization culture is form with behaviour and ways of thinking that are
unique to the organization, which is fostered by leadership and system
within the organization. (Kern, 2004) It is inevitable that the remaining
managements and employees feel uncomfortable with the change. The
change of target companys culture might lead to the personnel transfer and
make loss of the integration organization.
2.42 Human resource change perspective
The target firms are face with the internal management change as well. The
new culture, system and authority structure in the combined organization is
likely to result to the unsatisfied mood of the management and employees.
The selfish genes of the human animal make employees to accept change
difficultly. Perhaps, most majority management resist and antagonize the
change. However, the employees of in the bottom level are fence-sitters
trying to figure which way to go. Margolis (2006) argue that employees of
the target firms have the lower probability of continued employment with
new combined organization in the short term after acquisitions. The
personnel transfer of target firm more concerned than the acquiring
company. In terms of the management level, they might are face with the
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demotion or control power elimination in the combined organization, which
will threatened their interests even more the salary and pension condition.
The worries from management of target firms will push them to choose tobe hired by another company. Due to the rich experience and customer
resources, the dimission of senior level managers is a huge loss to the
companies. Therefore, how to settle them is an important task. The choice
of the right person for the right job measures the success of the merger and
acquisition. Efficiency savings through integration is concentrated, head
count reduction is inevitable. Employees in the target firms might be
arranged to department or dismissed. Every employee is fear of the lay off.
Before everybody being settled down, the rumour makes employees fell
anxious and uneasy. At this special period, it is the responsibility of the HR
department to negotiate the details of the severance pay with employees.
(Cartwright and Cooper, 2000) Therefore, the big turnover of the staff in
target company cost a great amount of severance provision to pay the fired
employees. However, the lay-off also makes adverse effect on remaining
people, they will lose the fragile confidence to the new organization and
their contribution to the target firm before will be cleaned up at the new start.
Thus, the remaining employee suspicious that whether their effort to the
company will be emphasized on or not, they will not pay every effort to the
new companies until the new combined organization give them confidence
again.
3. Summary and Conclusions
In the past decade, mergers and acquisitions have become the critical
transaction in the economy world. More and more organization chooses
mergers and acquisition to broaden their business field and build up their
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market capitals. Particular to the cross-board acquisition, M&A activities
have been regard as the most effective short-cut to enter a brand-new
market. Furthermore the global economic condition, mergers andacquisition stimulate the recession to recover. Deals of acquiring
companies and acquired companies enlarge the market capital; the
negotiation information stimulates the stock exchange market and attracts
the concern of public. Investors also are encouraged to make investment to
the market.
The bids can be divided into friendly bid and hostile bid, which depends on
the attitudes of managers from target companies. The small or private
companies might be favour of the bid from big organizations. The owner of
the target companies will receive reasonable sum of money for selling the
companies. The acquiring companies have the ability to develop the target
companies to a higher level. However, hostile bid battles always happened
in two big organizations, whose strengths are almost equal. Takeover is
likely to be rejected by the managers of target firms due to the different
objective of two organizations or undervaluation to the target companies.
The negotiation of two companies cost a long period and expensive cost to
hire the advisors and consulters to help the target firms counter for
acquiring companies.
During the pre-bid period, a lot of evidence present that the shareholders of
target firms can create more money than acquiring companies resulting
from mergers and acquisitions. The stock price of target companies will
increase significant then the information of acquisition release to the public.
The abnormal return to the shareholders of target firms will range from
9%-25% surrounding the acquisition announcement period. No matter the
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bid is friendly or hostile; the shareholders will gain much abnormal return
from the process of mergers and acquisitions. After the acquisition deals
have been closed, the process of post-acquisition integration start.Integration of organization culture, system, process, strategies becomes
the most important tasks. Meanwhile, managers and employees of target
companies are uneasy and anxious about the uncertainty and fear the
lay-off. They are worried about the change of positions or be dimissed by
the new combined organization. Big turnover of staff is inevitable, which
make them cannot focus on the ordinary work.
In conclusion, mergers and acquisitions are complicated transactions; the
effects on the target companies cannot be simply analyzed in short assay.
The long-term effect on the target companies should further observed and
researched. Moreover, the changeable and unpredicted world condition
makes the M&As activities become more risky, new economic theories will
emerge with the development of the economic world.
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Reflective Statement
This professional project is intended to link personal development andprofessional career with four different psychometric questionnaires
supported to understand and improve myself effectively. Self analysis help
people find most suitable method to learning and working. Taking four
psychometric questionnaires into consideration, communication with
people is my advantage. I can easily establish the harmonious relationship
with people, different opinions from everyone will be considered carefully by
me and I am pleased to adopt others suggestion, therefore, I am not a
autocratic person in my career. Furthermore, if I become a manager, my
leadership is a participative leader. Good relationship with others and open
minded innovation will help me to fulfil my achievement in my career life.
When I conduct the section A of analyze myself, I feel it is not easy to
understand myself and the results of the questionnaires can enlighten me.
A series of professional suggestions from the results help me to realize
myself further and deeply. Only making the most advantage of mine can
make me to learn further or work in the future effectively and prevent me
going to a wrong way result to failure.
Furthermore, the achievement of academic and professional career is
based on the self awareness and development. After analyzing mypersonalities, the results show that analytical mind is my advantage that I
should take advantage it to improve myself in the career. An academic
piece of work about mergers and acquisition activities will be conducted to
relate my personalities to future career and social demand. The topic I
choose can present my analytical ability to the economic field. The boom of
mergers and acquisitions activities has become the hot issue for the
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economy field; my academic work is to analyze the mergers and
acquisitions effect on the target companies, which is classified with different
aspect according to the different period stages. The section B is moredifficult than section A. Every aspects of the academic study should be
conducted precisely. A great deal of reference should be used to support
my opinion to the topic of mergers and acquisitions. Therefore, collecting
resources cost a long period: I must read huge amount of journal articles to
find precise theories can support my opinions; appropriate cases in the real
economic life cannot be ignored to take the theories into practise and make
my assay more reliable and more professional. I also learn more academic
knowledge about mergers and acquisitions through my writing and
investigation. Some inaccurate opinions of the topic I held before are
corrected via reading a lot of journal articles. Conducting the professional
project can be regarded as a process of learning. The professional
knowledge intake is in the positive method by myself, while the knowledge
intake in the university is a kind of passive learning method. In my opinion,
positive leaning method is more likely to be remembered. In conclusion,
conducting the professional project is a process of learning for me and
helps me to know more professional knowledge which will benefit my future
career.
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