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Mergers And Acquisitions Research

Posted on:2002-03-12Degree:DoctorType:Dissertation
Country:ChinaCandidate:H T YinFull Text:PDF
GTID:1116360065950410Subject:Quantitative Economics
Abstract/Summary:PDF Full Text Request
Regardless of public opinion, mergers and acquisitions (M&A) have increased dramatically in recent years. This thesis deals with topics of the theoretical foundation of M&A, key steps enacted against problems that senior managers will encounter during M&A, and the effectiveness of such action. The body of this work comprises four parts divided into eleven chapters.Part One (Chapter 2 and Chapter 3) presents theories of M&A. Chapter 2 discusses the theories of economic efficiency, agency problem and managerial behavior, information and signaling, and the theory of tax and re-assignment. In addition, the results of empirical studies are presented. Chapter 3 analyze the different theoretical foundations of various types of mergers, and discusses the risk factors of each.Part Two (Chapter 4 to Chapter 7) involves the practice of M&A. Beginning with the choice of strategy, an analysis is made regarding the determination of target company, its pricing, transaction structuring and integration. In Chapter 4, the focus turns to strategic decision making, and the choice of target company. By forming a model of analytic hierarchy process (AHP), the suitable target company is determined. Chapter 5 discusses the evaluation and pricing of the target company. Here, nine pricing models are compared, and their pros and cons in pricing procedure are analyzed. The problem of overpayment is also covered in this chapter. Chapter 6 contains an analysis of the structuring of mergers and acquisitions, including the areas of payment methods, tax engineering and transaction financing. Answers are put forward to resolve the questions of how payment methods influence the risks and gains of shareholders of both acquiring and acquired companies, and the relationship between the company's target capital structure and financing methods. Chapter 7 handles the integration of the two companies, centering on the integration of culture, the integration of organization structure, and organization re-engineering.Part Three (Chapter 8 and Chapter 9) is empirical studies. In Chapter 8, by introducing the evaluation methods of organization effectiveness, from a new point of view, we probe into the influence of the M&A to all interest-relevant sides. This method makes up the one-sidedness of early works. Furthermore, we analyze the change of government policy and the new development of antitrust economics. By introducing option theory into the analysis of M&A problem, we discuss the value of mergers and acquisitions to a company. This method improves the traditional analytical technique which cannot price the option value created by M&A transaction. Moreover, we discuss the pricing of growth option, flexible option, scale option and abandonment option.Part Four (Chapter 10) deals with cross-border mergers and acquisitions. First, discussion is generated regarding the motives, risk factors and successful principles of cross-border transactions.Then, by analyzing the bias existing in mega-cross-border transactions, suggestions are offered as to how the companies and governments of developing countries should face the violent competition from cross-border companies.Finally, in Chapter 11, according to the studies of the M&A histories of developed countries and China, the influence of the M&A wave to micro- and macro-economy is given careful consideration, followed by discussion of a realistic meaning of M&A to Chinese enterprises, as well as to current problems and difficulties. The chapter ends with a close look at the M&A trend.This thesis not only discusses the theories and practice of M&A, but also introduces a numerical analytical mechanism in key steps. By combining the simple mathematical tool and existent analytical methods, it provides a complete method for the practitioners who wish to do the transaction successfully.
Keywords/Search Tags:Merger and Acquisition, Synergy, Payment Structuring, Integration, Real Option
PDF Full Text Request
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