Mergers and acquisitions count among the most spectacular and most obvious strategic demonstrations on the scale of the company. Globalisation has led company to think globally and act locally. Such a change in the business world have made emerge the need to find partner around the world, and even to merge with complementary companies in order to sustain the corporate strategic advantage and to create value.
Purpose : The objective of this paper is to integrate major Merger & Acquisitions theories in order to establish a warning model pointing out the main pitfalls changing promising motivations into failed implementation in the process of Merger & Acquisition…
Contents
1 INTRODUCTION
1.1 M&A in the globalisation
1.2 What are Mergers and Acquisitions?
2 PROBLEM
2.1 Acquisition as value creation
2.2 Merger & Acquisition as a dynamic process
2.3 Going through the process of Merger & Acquisition
2.4 Scope
3 PURPOSE
4 METHODOLOGY
4.1 Scientific Approach
4.1.1 M&A through hermeneutical perspective
4.1.2 A subjective analysis
4.2 Scientific method
4.2.1 A deductive framework, but an aim also to induce.
4.2.2 Choice of theories
4.2.3 Choice of a case study
4.2.4 Methodological limitations
4.3 Reader’s Guide
5 THE TRANSNATIONAL HORIZONTAL MERGER
5.1 Total Merger vs Partial Acquisition
5.2 Transnational vs. National
5.3 Related vs. Un-related
5.4 Horizontal vs. Vertical
6 UNDERLYING DRIVING FORCES OF M&A :CREATING VALUE
6.1 Income motivation
6.1.1 Synergistic cost reduction
6.1.2 Developing market share
6.2 Outlay obligation
6.2.1 Managerial inefficiency
6.2.2 Size of the firm
6.2.3 Imbalance between growth and resources
6.2.4 Firm’s evaluation
6.2.5 Payments of dividends
7 M & A IMPLEMENTATION
7.1 Strategic management
7.1.1 Vision
7.1.2 Communication
7.1.3 Leaders
7.1.4 Profit and process in business strategy
7.2 Synergies & Operational Management
7.2.1 Market synergies
7.2.2 Synergy implementation
7.3 Cultural management
8 REASONS OF M&A FAILURE
8.1 The paradox of Manager vs. Shareholder
8.1.1 Shareholders’ expectation : maximizing value through synergies
8.1.2 The managerialism strategy
8.1.3 The Hubris hypothesis
8.1.4 Failure as no trade-off
8.2 No planned integration cost
8.2.1 Cost of interrelationships
8.2.2 The Penrose effect
8.2.3 Cost of job cutbacks
8.3 The problem of social compatibility
8.3.1 Demotivating employees
8.3.2 Resignation risk
8.3.3 Cultural compatibility
8.3.4 Culture clash measurement
9 TOWARDS THE WARNING MODEL
9.1 M&A as intertwined system
9.2 The warning model
10 PHARMACIA UPJOHN : AN HISTORICAL PERSPECTIVE
10.1 Pre-merger context
10.2 The new merged company
10.3 Hassan’s turnaround
11 ANALYZING PHARMACIA UPJOHN MERGER
11.1 Positioning motivations
11.1.1 Transnational horizontal merger
11.1.2 Understanding motives
11.2 Building social equality
11.3 Seeking Efficiency
11.3.1 The non synergistic restructuring
11.3.2 An attempting long-term growth ?
11.3.3 Immediate performance and social clash
11.3.4 Stage 3 : conclusions
11.4 Turning around merger integration
11.4.1 Systemic strategy : towards the strategic barycentre
11.4.2 Sustaining integration : the evolutionary perspective
11.5 Summary
12 CONCLUSION
13 BIBLIOGRAPHY
14 APPENDIX : INTERVIEW GUIDE
Author: Got, Elisa,Sanz, Fabrice
Source: Linköping University
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