Mergers and Acquisitions

By

ACKNOWLEDGEMENTS

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with the university.

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ABSTRACT

In this study, we try to explore the concept of merger and acquisition in a holistic context. The main focus of the research is on mergers and acquisitions. The main objectives of this research were to analyse the factors that lead to the merger of Satander and Abbey, to determine whether the merger has created or destroyed value, to determine whether the objectives of the merger has been achieved and to recommend an optimum merger policy. The researcher did in-depth study to reach a meaningful conclusion.

TABLE OF CONTENT

ACKNOWLEDGEMENTSII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the Study1

Significance1

Purpose of the study2

Research Aims and Objectives2

Research Question2

Ethical Concerns3

Limitations of This Research3

Next chapter outline3

CHAPTER 2: LITERATURE REVIEW5

Mergers5

Acquisition5

Mergers and Acquisitions5

Theoretical Framework6

Differences between Mergers and Acquisitions6

Cross-Border Acquisitions7

International Mergers and Acquisitions8

The Post-Acquisition Process8

Managers Actions in Acquisitions10

Do Stock Mergers Create or destroy Value for Acquires?11

Motives for M&A18

Key Performance Indicators after Merger20

Financial Performance20

Limitations of Ratio analysis24

REFERENCES25

CHAPTER 1: INTRODUCTION

Background of the Study

On Monday, July 26, 2004, the Boards of Spanish Banco Santander and British Abbey National Bank reached an agreement over the terms of the acquisition. They publicly announced Santander's friendly all-share offer for Abbey, which amounted to EUR15.6bn. Throughout the months of September, October and November, the deal received regulatory approval from the European Commission, UK's Financial Services Authority, Spanish CNMV and the Bank of Spain, as well as certain other regulatory bodies. The Extraordinary Shareholders' Meeting of Abbey approved Grupo Santander's friendly bid on October 14, 2004. Santander's shareholders approved the capital increase needed to carry out the deal on October 21, 2004. The merger with Abbey, the UK's six largest bank, made Santander one of the world's ten largest banks by market capitalization.

The deal was closed on November 12, 2004 when Abbey National became a wholly-owned subsidiary of Grupo Santander. Lord Burns and Mr. Francisco Gómez Roldán were nominated respectively Chairman and CEO of Abbey. (DePamphilis 2009 45)

Significance

This research would be very beneficial for the future, as very little work has been done on mergers and acquisitions at present. Moreover, this research would open new doors for the research analysts to study the implications and effects of mergers and acquisitions.

Purpose of the study

The purpose of this thesis is to investigate the post-acquisition process ...