In today's complex and dynamic corporate world, there is a tremendous allure towards mergers and acquisitions. Companies, in the pursuit of rapid growth and gaining competitive advantage over the other market players, opt for mergers and acquisitions as a key to corporate success. In the recent years, the number of mergers and acquisitions has increased immensely, but evidence shows that as many as seven out of ten fail to add value and succeed (Dealogic mergers & acquisitions review, 2002). Companies are lured by the merger mania, but the success rate of such strategic moves (Andersen, 2000) has been disappointing.
This research is an analytical study of the essence of mergers and acquisitions.
[...] Pills Gain More Corporate Adherents (2000) Mergers & Acquisitions: The Dealermaker's Journal, July, Volume 35, Issue p17. Schraeder, M. & Self, D. (2003), Enhancing the success of mergers and acquisitions: an organizational culture perspective. Management Decision, Volume 41 Number pp511-522. Tips to make that merger work (2002) Journal of accountancy, Nov 2002, Volume 194 Issue 5,p28. Vos, E. & Kelleher, B. (2001) Mergers and takeovers: A Memetic Approach. Journal of Memetics Evolutionary Models of Information Transmission, Volume 5 Issue pp10-23. Wall Street Journal, Harvard Business Review, Forbes and Fortunes. [...]
[...] To determine if merged companies are happy with the decision of merger and if mergers and acquisitions are the right formula for growth and success in today's complex and dynamic corporate world, case study methodology has been adopted. Few cases would be examined to answer the research question in the light of relevant theories of strategies for growth and expansion; and data from secondary research which has been listed below. Sources of secondary research Journal articles Bower, J. (2001) Not All M&As are alike. [...]
[...] Mergers and acquisitions are a key to success in the corporate world - Strongly agree - Agree - Neither agree nor disagree - Disagree - Strongly disagree 2. Mergers and acquisitions are an appropriate strategy to enhance growth - Strongly agree - Agree - Neither agree nor disagree - Disagree - Strongly disagree 3. Mergers and acquisitions help companies to gain greater market share and profits - Strongly agree - Agree - Neither agree nor disagree - Disagree - Strongly disagree 4. [...]
[...] The key limitations for the methodology to be used are as follows: Case study methodology restricts the research to a few case studies and deduction of the conclusion from such methodology may be subject to bias of the author. Questionnaire method suffers from following problems: - Low rate of response; - Problem of incomplete responses - Difficulty in analyzing responses due to lack of clarity Appendix 1 - Design of questionnaire Are mergers and acquisitions the preferred option for businesses seeking rapid growth and success? [...]
[...] Based on the study of experts, following are some of the reasons for mergers and acquisitions to be the preferred option for companies. Corporate growth The most obvious reason for mergers to happen is corporate growth and expansion. Companies enter into a merger spree to grow, sometimes both locally and globally. Economies of scale Large scale operations due to mergers and acquisitions reduce per unit cost and enhance profit margins of companies and enable them enjoy economies of scale Diversification Mergers and acquisitions often widen the product portfolio through diversification. [...]
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