Finance Study In Mergers, Acquisitions And Consolidations Of Enterprises

Mergers and acquisitions of enterprises have become the focus in the business circle. Execution from the finance perspective undoubtedly plays a signification role. This article presents a comprehensive analysis on relevant issues in the process of corporate mergers, acquisitions and consolidations. It needs to be pointed out that this article, prepared as a MBA degree dissertation, examine and review issues from the perspective of finance managers or project managers in a merger and acquisition project. Therefore, it focuses on the construction of theories, methods and systems, rather than on technical details. In accordance with this guidance, this article does not address such issues as accounting methods or financial statements consolidation in a merger and acquisition that are typically deemed important in a standard finance study of corporate mergers and acquisitions. In addition, this article has two main features as follows. First, corporate merger and post-merger consolidation are deemed as one inseparable unit. The current market practice tends to emphasize the merger itself but overlook post-merger consolidation. However, closing of a merger transaction is only the first step toward a successful merger. The eventual goal and the expected effects of a merger will not be achieved until and unless effective consolidations are carried out after the merger. Second, this article includes as many as possible key finance management issues arising throughout the merger and consolidation process and integrates such issues into one system. It is certainly not a simple process of collecting and listing issues, but offers internal logic connections and systematic analysis. That is, it includes pre-merger financial evaluation and planning, valuation of the target company during the merger process and consideration to be adopted, and consolidation of finance policies, resources and personnel after the merger. This article presents comprehensive analysis on the above-mentioned issues from the management perspective.