The aim of the study is to reveal the impact of merger and acquisition on the performance of companies in UK which will be achieved by analysing the financial performance of sample companies involved before and after M&A. The study will analyse the financial statements of randomly selected companies before and after merger so as to reveal the true impact from such merger or acquisition. The study begins with an introduction and initial discussion of background followed by a detailed literature review. The research methodology is designed so as to facilitate analysis of secondary data collected from reliable online sources. The findings section discusses the research findings which is then analysed so as to critically analyse the research findings with research objectives and to what extent does the findings answer research questions. After the interpretation of findings, the research finally ends with conclusion and recommendations. Table of Contents Abstract 2 Chapter 1: Introduction 6 1.1. History and Background of the Research 7 1.2. Objectives of the Research 8 1.3. Aims of Research 9 1.4. Research Problem and Research Questions 9 Chapter 2: Literature Review 10 2.1. Types of Mergers 11 2.2. Motives for mergers 12 2.3. Empirical Studies 16 2.3.1. Event Studies 16 2.3.2. Accounting Studies 16 2.3.3. Clinical Studies 17 2.3.4. Executive Surveys 17 Chapter 3: Research Methodology 17 3.1. Research Problem 18 3.2. Primary Research 19 3.3. Secondary Research 19 3.4. Data Collection 20 3.4.1. Primary Data Collection 21 3.4.2. Secondary Data Collection 22 3.4.3. Justification of Secondary Data Collection 22 3.5. Sampling and Sample Size 23 3.6. Data Analysis 23 Chapter 4: Findings of the Research 24 4.1. Overview 24 4.2. Financial Statement Analysis of Companies BEFORE Merger and Acquisition 25 4.2.1. Performance Analysis of Acquirer Company - Barclay Plc (Before M&A) 25 4.2.2. Performance Analysis of Acquired Company - Lehman Brothers Holdings Inc (Before M&A) 30 4.3. Financial Statement Analysis of Companies AFTER Merger and Acquisition 35 4.4. Results of Findings 40 Chapter 5: Analysis of Findings 42 5.1. Brief Overview of Findings 42 5.2. Reasons for Merger 43 5.3. Consequences of M&A 45 Chapter 6: Conclusion 46 Chapter 7: Recommendations 48 References 53 Appendices 57 Table 1 – Financial Statements of Lehman Brothers Holdings Inc. (Before Merger) 57 Table 2 – Financial Statements of Barclays Plc (Before Merger) 58 Table 3 – Financial Statements after Merger and Acquisition 59 Chapter 1: Introduction In today’s world the primary objective of a firm is to survive the cut-throat competition and one way to do that is to make more profits and add value to shareholders’ wealth. The ladder of success for any firm is ‘growth’ which can be achieved either by expanding existing resources or introduction of new products and services. Another way of achieving growth is through merger and acquisition (M&A). The former is also known is organic growth where the firm uses its own resources (retained earnings, reserves and surplus, or equity capital) for financing growth. The later is also known as inorganic growth where the acquirer firm buys the assets and liabilities of the target(s) as on a given date (Sherman, 2010, p.1). Thus, M&A are external growth strategy that gains popularity mainly
MERGERS & ACQUISITIONS Abstract In recent times merger and acquisitions (M&A) have become one of the most widely debated topics in the corporate sector. Many companies have been found to actively achieve growth through M&A. The increased competition from globalisation has forced companies to choose M&A as an important strategic decision for expansion and cost reduction tool…
A merger is a business process by means of which, two or additional number of companies can pool their business assets and form a single organization. In general the stocks of the parent companies’ are given up and instead the stock of the new company is issued.
This research discusses the strategic ways on how to implement a cross border merger followed by analyzing the advantages of investing through them and tackles in details internal and external factors that need to be considered prior to a merger, the reasons for behind a successful or failed overseas mergers, impact on the shareholders’ value and the trend of global mergers post the financial crisis.
The understanding over the impact and influence of misevaluation in the failure of mergers and acquisitions has been presented in a logical and illustrative manner by covering wide arrays of information on the research topic. The introduction part of the research presented an overview of the research topic, aims and objectives and detailed description of mergers and acquisitions.
The paper aims to identify the general impetus of mergers and acquisitions within UK banking industry and the impact of NatWest acquisition on the M&A trends. The analysis of RBS and NatWest both in pre-acquisition period and post-acquisition period can provide valuable insight into the driving force for acquisition and whether this has increased RBS’ shareholders’ wealth.
This research's aim is to assess the impacts of mergers on organizational performance and the wealth of the stakeholders in the communication sector in Europe and America. The research will employ both exploratory and descriptive research to gain in-depth and concise information in the research area.
The following dissertation studies in detail the merger between Kraft and Cadbury and the role that human resources management and organizational culture will have in the post-merger integration of the two companies. U.S. based Food Company acquired British chocolate giant Cadbury’s in January 2010.
Introduction: 9 2.1. Merger: 9 2.2. Acquisition: 9 2.3. Motives behind Mergers and Acquisition: 10 2.4. Mergers and acquisitions according to economies of scale theory: 11 2.5. Mergers and acquisitions according to economies of scope theory: 12 2.6. Strategic Mergers versus financial Mergers: 12 2.7.
The principle purposes of merger of two companies are to strengthen their hold in the market and also to earn a competitive advantage in the industry. Studies have proved that merger waves are usually caused by repercussions arising out of economic and technological factors.
For whatever reason, companies sell out and new companies come to take their place. It is increasingly the way of the world. This is now the way business works. It is common for several industries to consolidate due to rising costs of production and several other factors. Large companies dominate in a global economy.
The paper studies the impact of the consolidation of banks and its effects on the wealth of the shareholders. Though it is largely thought that consolidation is likely to have a positive effect on the wealth of the shareholders, study has found that it is not the case.
12 pages (3000 words)Dissertation
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