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Mergers and acquisition - Essay Example
Pages 14 (3514 words)
In modern market, mergers and acquisition (M&A) have become a common strategic tool for the development of business activities; through the M&A firms increase their investment capabilities but also their competitiveness towards their rivals; at least, these are the initial intentions of shareholders that agree to proceed to a relevant procedure…
Firms in different industrial sectors tend to respond differently when entering a M&A process. Current study focuses on the effects of M&A process on the increase of shareholders value and the creation of shareholders wealth. Reference is made on a specific industrial sector: the financial services industry. The case of a recent merger of two financial institutions - banks in Britain, Lloyds and HBOS, is used in order to show all the potential aspects of the issue under examination. Employees from both these institutions have accepted to participate in the study. The results - along with the material published in the literature - indicate that M&A can be a valuable strategic tool for the increase of a firm's profitability; however, its effects on the creation of shareholder wealth are not quite clear.
The study focuses on the examination of the following issues: a) how can mergers and acquisition benefit a firm's shareholders, b) which are the effects of mergers and acquisition on a firm's equity' c) are there specific measures taken for the increase of shareholders' wealth in the case of a merger or acquisition, d) which is the role of state in the development of the relevant procedure - control by antitrust authorities, e) does the leadership style affects the development of mergers and acquisition' And f) does the n ...
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