Mergers and Acquisitions

Paper Summary:

This paper discusses mergers and acquisitions. It covers the possible benefits of mergers and acquisitions and the factors that lead to success. It then details reasons why so many mergers and acquisitions fail to meet their objectives, including improper motivations, incorrectly estimating value, financing, integration and cross-border complexity.

From the Paper:

"Structuring of a cross-border acquisition or combination involves all of the issues discussed in this paper plus it poses additional risks. There are two sets of laws and regulations, two sets of tax and accounting rules, two very diverse cultures, two political systems, and in some cases two securities markets (Ruegger). A cross-border merger or acquisition might also involve other financial issues such as raising funds in one market for investment in another, changes in the exchange rate and different accounting standards. The winners in cross-border mergers understand the differences in corporate specifics and learn how to capitalize on its corporate diversity (Strebel, 2002). This will require building mutual trust and taking advantage of the best practice on both sides."

Sample of Sources Used:

• Kroll, K.M. (2005, September). Structuring a sound M&A deal. Business Finance. Retrieved April 30, 2006 from Web site: http://www.businessfinancemag.com/magazine/archives/article.html?articleID=14476
• Mergers and acquisitions. Wikipedia. Retrieved April 30, 2006 from Web site: http://en.wikipedia.org/wiki/Merger#Motives_behind_M.26A
• Schmalensee, D, Riddell, A, and Joiner, D. Making mergers more successful. MIT Sloan School of Management. Retrieved April 30, 2006 from Web site: http://www.schmalensee.com/articles/sloan.pdf
• Strebel, P. (2002, August). Focus on corporate specifics not Nnational clichecross-Border lessons from the DaimlerChrysler merger. IMD. Retrieved April 30, 2006 from Web site: http://www02.imd.ch/news/newshome/index.cfm?art=2325
• The latest mergers: why some will fly, and others won't (2005, March 30). Wharton School. Retrieved April 30, 2006 from Web site: http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=1137&specialId=30

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