SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES

Despite the seemingly high risks attached, Mergers and Acquisitions (M&A) have been around for almost a century and have been used as an important tool in the growth strategy of a company. Empirical evidence on the creation of value through M&A activity has shown diverse results. Drawing upo...

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Main Author: Alexander, Joby
Format: Dissertation (University of Nottingham only)
Language:English
Published: 2006
Subjects:
Online Access:https://eprints.nottingham.ac.uk/20773/
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author Alexander, Joby
author_facet Alexander, Joby
author_sort Alexander, Joby
building Nottingham Research Data Repository
collection Online Access
description Despite the seemingly high risks attached, Mergers and Acquisitions (M&A) have been around for almost a century and have been used as an important tool in the growth strategy of a company. Empirical evidence on the creation of value through M&A activity has shown diverse results. Drawing upon this framework, this dissertation aims to identify whether value has been created or destroyed by undertaking merger activity. An attempt is made to investigate the outcome of the merger and evaluate the effects of merger on both the firm and the shareholder. A case study of two diverse companies supplemented by a literature review is undertaken to see whether, both these entities have benefited from the merger. Theoretically, Mergers and acquisitions are assumed to improve the performance of the company through expense reduction, synergies, economies of scale and other factors. Empirical evidence on the value added to the shareholders of the merged firms varies from positive to negative. In the case studies undertaken, the results from accounting studies show that the firm's performance has improved thereby creating value for the firm. However, wealth gains to the shareholders of the merged companies calculated, using the Market Model, show negative abnormal returns.
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spelling nottingham-207732017-12-21T02:03:34Z https://eprints.nottingham.ac.uk/20773/ SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES Alexander, Joby Despite the seemingly high risks attached, Mergers and Acquisitions (M&A) have been around for almost a century and have been used as an important tool in the growth strategy of a company. Empirical evidence on the creation of value through M&A activity has shown diverse results. Drawing upon this framework, this dissertation aims to identify whether value has been created or destroyed by undertaking merger activity. An attempt is made to investigate the outcome of the merger and evaluate the effects of merger on both the firm and the shareholder. A case study of two diverse companies supplemented by a literature review is undertaken to see whether, both these entities have benefited from the merger. Theoretically, Mergers and acquisitions are assumed to improve the performance of the company through expense reduction, synergies, economies of scale and other factors. Empirical evidence on the value added to the shareholders of the merged firms varies from positive to negative. In the case studies undertaken, the results from accounting studies show that the firm's performance has improved thereby creating value for the firm. However, wealth gains to the shareholders of the merged companies calculated, using the Market Model, show negative abnormal returns. 2006 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/20773/1/Joby_Alexander_Dissertation.pdf Alexander, Joby (2006) SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES. [Dissertation (University of Nottingham only)] (Unpublished) Synergies Mergers Acquisitions Case Studies Finance Investment
spellingShingle Synergies
Mergers
Acquisitions
Case Studies
Finance
Investment
Alexander, Joby
SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title_full SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title_fullStr SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title_full_unstemmed SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title_short SYNERGIES FROM MERGERS AND ACQUISITIONS: CASE STUDIES
title_sort synergies from mergers and acquisitions: case studies
topic Synergies
Mergers
Acquisitions
Case Studies
Finance
Investment
url https://eprints.nottingham.ac.uk/20773/