StudentShare solutions
Triangle menu

Finnc nd Growth Strtgy - Essay Example

Not dowloaded yet

Extract of sample
Finnc nd Growth Strtgy

Of cours ths findings dpnd on th sctor nd th typ of M& tht ws don. Mny fctors ply n importnt rol in th furthr succss of th compnis, nd th on, myb th most importnt cn b th knowldg nd bility to crt vlu ftr.
Mrgrs nd cquisitions, two forms of rstructuring, rprsnt both strtgic opportunitis nd thrts for compnis, s ownrship chngs hnds. Mrgrs nd cquisitions crry on stting nw rcords in both volum nd siz. cquisitions probbly r not th quickst wy to grow comprd to othr options nd, from th prspctiv of top mngrs, thy r stimulting nd oftn finncilly rwrding. Howvr, by most ccounts, cquisitions r pron to filur, with som hving disstrous consquncs.
Studis of th short-trm ffcts of M&s point out tht M&s gnrt vlu, vn though most of this vlu ccrus to th trgt firm. Rsrch in th US nd UK indicts tht th shrholdrs of th trgt firms xprincd gins of btwn 16% nd 45%. cquiring firms' shrholdrs, on th othr hnd, xprincd bnorml rturns rnging from -1.1% to 7.9%. Th combind firms' bnorml rturn ws btwn 1.8% nd 3.5%. (S Jnsn & Rubck 1983; Frnks & Hrris 1989; Bchr 2000; Mulhrin & Boon 2000; Kohrs & Kohrs 2000; ndrd t l. 2001.)
Th long-trm ffcts of M&s in th US nd th UK hv bn xmind xtnsivly (S grwl, Jff & Mndlkr 1992, Brns 1984, Frnks, Hrris & Titmn 1991, Grgory 1997, Knndy & Limmck 1996, Limmck 1991, Lodrr & Mrtin 1992, Loughrn & Vijh 1997, Mitchll & Stfford 2000, Ru & Vrmln 1998). Ths studis, lthough criticisd th mthodology, ll indict tht th shrholdrs of th cquiring firms in most instncs los vlu. Th ngtiv typicl rturns wr s high s -20%. Th crtion of ngtiv typicl rturns holds tru spcilly whn th mthod of cquisition ws othr thn by mns of tndr offrs.
Th min rson for M& to tk plc is xpctd synrgis, mngril hubris, nd promising solution of gncy problms. Synrgis r th prim motivtion for th bid nd s rsult for th trgts nd th biddrs tht shr th wlth gins. lthough most bidding compnis mk th sttmnt bout th potntil synrgis from th mrgrs nd cquisitions, frquntly th forcstd bnfits r not obtind. This cn b rsult of ovr optimistic forcst by th bidding mngmnt or simply th fct tht th mrgr for inititd for nothr rson, such s gncy problms. So ths thr tkovr motivs hv diffrnt outcom on th wlth crtd ftr mrgrs nd cquisitions.
If synrgy is th primrily motiv for th mrgr, thn th trgt's nd biddr's shrholdrs should gin nd th distribution of wlth should only dpnd on th brgining powr of th biddr nd th trgt.
If th scond motiv tks plc nd it mns tht gncy problm is worsning, th min slf-intrst of th biddr's mngmnt is th prim rson for th mrgr or cquisition. In such cs, mngrs just focus on growth rthr thn on th shrholdrs' vlu. For xmpl, Conyon nd Murphy (2002) show tht for th UK, siz (nd not th prfomnc) is th min dtrminnt of th mngril slris. This fct cn xplin why mngrs r so tmptd to us fr csh flow to furthr build th mpir tht hopfully will rsult in highr slris nd bonuss. No wondr tht ftr such circumstncs, th totl vlu ftr mrgrs nd cquisitions ctully gos down. Mngrs who r ggrvtd by prsonl intrsts, (.g. mximiz th siz of th firm nd thir fild of control) r mor pron to sk out lrg, wll known compnis s cquisition trgts - nd usully ovrpy in th bidding procss. This is n doubtful motiv for th cquisition of rltivly smll nd unknown privt compnis. Th cquisition of privt compny mor sily fits th motiv of mximiztion of shrholdr wlth.
nd th third motiv of M& cn b th ...Show more

Summary

Mny compnis' stocks bdly undr prform th mrkt ftr big mrgr. Th 30 lrgst dls of th pst fiv yrs hv on vrg undr prformd Stndrd & Poor's 500 stock indx. Yt th trnd is mor complictd thn tht numbr suggsts. It includs som spctculr succsss nd som spctculr fumbls.
Author : carmenrussel
Finnc nd Growth Strtgy essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Finnc nd Growth Strtgy"
with a personal 20% discount.
Grab the best paper

Related Essays

Employee Reward nd Development
Knowledge has become a currency for competitive success apart from being a key factor for productivity (Egan, Yang and Barlett, 2004). According to Cole (1995) and Sadler (1994) learning is a complex process involving skills like mental mapping, use of intuition and imagination, and problem solving (Yeo, 2002).
6 pages (1500 words) Essay
US government mngement budget plnning nd control
Budgets limit expenditures to the revenue аvаilаble, to ensure bаlаnce аnd prevent overspending. Most of the work in drаwing up а budget is technicаl, estimаting how much it will cost to feed а thousаnd shut-ins with а Meаls-on-Wheels progrаm or how much revenue will be produced from а 1 percent tаx on retаil sаles.
9 pages (2250 words) Essay
E-commerce as a Business-to-Consumer International Market Entry Strategy
And, because it is possible to do this for every customer that touches the website, the Web offers a kind of market research that is unparalleled in richness and available in near real time. Especially if to be used to working through indirect channels, having this detailed information about customers can be a valuable source of insights into how to optimize firm's marketing and product mix.
15 pages (3750 words) Essay
Employers nd Collective Bargaining
It normally i een that th employer obtain th advntage of th collective bargain in particular, th employee limited line to take th indutrial project, in particular th right to trike. Th international legal tendencie upport more limited line of collective bargain for th civil ervnt, particularly peronnel, (Bach, 1999,21) military police force nd peronnel working with th adminitration tate.
8 pages (2000 words) Essay
Development of smll nd medium sized enterprise
The mjority of smll nd medium sized enterprises do not crry out corporte plnning nd do not think strtegiclly. The directors of SMEs believe tht the tcticl plnning tht they crry out mounts to strtegic plnning. This belief is mjor contributor to the very high filure rte of smll nd medium size enterprises during their first three yers of existence.
6 pages (1500 words) Essay
Psychologicl Fctors nd Sport Performnce
Fctors involved with sports performnce re prsympthetic nd sympthetic system chnges. Sports performnce cn be improved by providing cler system of rewrds nd scheduling, constnt ttention to relistic trining schedules, implementing psychologicl testing, nd monitoring dietry intke cn llevite the potentil for stleness nd burnout.
20 pages (5000 words) Essay
Project monitoring nd control
The results of the mesurements re ssembled into forml nd informl reports, which re used by both senior mngement nd the project tem to identify devitions from plnned performnce nd their cuses. The tem cn then tke corrective ctions to limit the impct of these devitions on the project's schedule, budget, or resources.
9 pages (2250 words) Essay
Criticl nlsys nd evlution of opertions within chosen orgniztion
With focus on three key mrket res - science, lw, nd business, its businesses in the scientific division publish more thn 1,200 journls worldwide in the physicl, life, socil, nd medicl sciences, nd the compny opertes n interntionl network of medicl communictions services (2) Reed Elsevier's lw division serves, through vriety of publishing formts, importnt legl, tx, reference, nd eductionl mrkets round the world.
5 pages (1250 words) Essay
Development Economics nd interntionl debt crisis
It hs generted series of intrctble problems with no esy solutions. ccordingly, lthough ll world leders, including the Pope nd Nelson Mndel, hve clled for the elimintion of debt, technicins hve not found solutions stisfctory to both debtors nd creditors. Prt of the reson for this lck of consensus is tht debt does not exist in vcuum.
12 pages (3000 words) Essay
Veblen nd Conspicuous Consumption
ccording to Veblen's theory of conspicuous consumption, individuls emulte the consumption ptterns of other individuls situted t higher points in the hierrchy. The socil norms tht govern such emultion chnge s the economy nd its socil fbric evolve over time.
8 pages (2000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation