MERGERS AND ACQUISITIONS

Mergers and Acquisitions

Table of Contents

Chapter 2: Literature Review2

Overview of M&A2

Understanding the Concept2

Corporate Structure of Mergers3

Mergers by creating a new company-3

Mergers by Absorption-3

Horizontal Mergers-3

Evolution4

Motive behind Mergers5

Aspirations5

Research Reviews6

Study of Events6

Studies Focused on Short Term7

Long-term Focused Studies7

Studies focussed on operations8

Issues Related to Strategies8

Corporate Cultures9

Stress10

Resistance to Change11

Image, Identity and Confidence12

Communication13

Turnover15

Summary15

Chapter 3: Research Methodology16

Introduction16

The Cases Used16

Selection17

Evidence of usefulness17

Procedure18

Reliability18

References20

Mergers and Acquisitions

Chapter 2: Literature Review

These section analysis literatures which relates to the aspects of mergers and acquisitions related to various objectives and questions that laid out for this particular research. The literature review is divided into various categories in order to have a better understanding about the research topic and the literature review also takes a look at various other supplementary literatures that are significant to this research.

Overview of M&A

Understanding the Concept

The literatures have put their main focus on need and importance of M&A which remains as the key strategic option for various companies from different industries considering the present dynamics and complexities surrounding the economy, as well as market environment. After looking at the literature, there have been three different words which are in interchange to explain or indicate this main strategic option and those may be take-over mergers or acquisitions. Arnold (2002) defines merger as the combination of two companies that are almost equal in size with fair terms and conditions to both sides and the shareholders from both companies will remain as the joint-owners of the newly formed company. Acquisition in contrary refers to as the process of forming of the new company from two companies through acquiring of both the assets and liabilities by one company. In Brealey et al (2006), take-over refers to as a process through a company purchases all the assets or stocks of another company (pp.65). The common thing from all of the above mentioned three terms is to understand the process of forming a single company after the combination of different companies having their separate ethics, ways of doing things as well as having a separate organizational culture.

Corporate Structure of Mergers

Merger occurs when two or more companies decide to pool their assets and form a new company. There is talk of acquisition when a company buys the shares or assets of other company to have control over it without carrying out the merger of their heritages. The ultimate goal is to create value. Many processes in Mergers and Acquisitions are caused by the need of entrepreneurs to develop and solidify its activities in a particular industry, trying to stay on and consolidate it on the market. However, others seek to gain profit in the short term and seek to acquire a company with the objective of increasing its value and then sell at a higher price. The common factor in both is the stimulus to add value to the acquired company. There are three main structures of mergers.

Mergers by creating a new company-

It consists the fusion of two or more companies to create a modern society, in which each contributes its complete heritage and ...