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Finance & Accounting
Pages 3 (753 words)
Deals from Hell- Robert Brunner Name: Institution: Course: Class: Date: Questions from students are sometimes perplexing, which can prompt a reply that is very important. It is for this reason that this book sought to present a more discipline and sharper thinking to the science of M&A and financial markets.
The book surveys failures in mergers and acquisitions, drawing its findings from a number of deep reviews of research studies and case studies from ten noticeable failures. The conventional wisdom about M&A is greatly challenged by the author. In the same way, the author enriches ability of anticipating failure and promoting success. Merger is simply consolidating two firms to create a new entity by law (Brunner, 2005). It is clear that M&A does pay for bidders, both on average and overtime; however, the return variance is sizeable whereby one cannot meet the average return with confidence by simple naive acquisition. Managers and investors should be ready for disappointments by suppressing overconfidence. This is so because the market for acquisition very segmented, thus returns to investors also vary across the segments. This is why broad assertions about the success and failure of M&A are less significant. Comparison of failure cases in details are based on six elements in common, which are spread individually across the business environment. The convergence of these failure cases in the context of merger is what elevates the likelihood of failure. Since failures in mergers result from a number of factors, preventing failures must be by attacking the factors in a systematic combination. As Bruner points out in his book, financial risks in M&A are part of the cost of doing business. ...
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