The workings of mergers and acquisitions

Résumé du document

The fever of mergers and acquisitions reigns over the big, world companies (American, European etc.). Billions of dollars are exchanged every day from hand to hand. Oil, Hi-tech, pharmacy, banks, insurance, aeronautics, everywhere companies are merging. To be efficient a merger must bring some value to the company by increasing the competitiveness or by bringing new skills.

Extraits

[...] IV The brake about Mergers and acquisitions The list of the operations of fusion announced and which finally fail is long. Some M & A do not really manage to end, and the others take place but collide with practical difficulties which finaly condemn them. It is necessary to know that 50 in of the fusions do not give the expected result. The main reasons are the fallowing: -the lack of synergies -intercultural management First of all let's talk about the fact that there is no synergy between two activities. [...]

[...] This concentration has increase since 1997 with mergers and acquisitions which are made more and more quickly with sum of money ever higher and concerning companies which are ever bigger. Mergers and acquisitions are more often the result of strategic orientation in a particular sector than the will of an individual company. This kind of behavior could explain why we are spectator in some activities sector of true wave of mergers and acquisitions. However they are different according to their countries and to their activities area. Nevertheless some general trends could be analyzed. [...]

[...] Exectutive summary There is No a day without that the press deals with a new mergers and acquisitions Mergers and acquisitions are becoming a famous trend in the business world. In order to success a mergers and acquisition there are some rules to respect. The operation of mergers and acquisition aims at certain objectives. First of all they aim at acquire or reinforce its power on a targeted market The list of the operations of fusion announced and which finally fail is long. The main reasons are the fallowing: -the lack of synergies -intercultural management Hewlett Packard and Compaq-Computer. [...]

[...] On the European market, knowing that the German bank makes 2/3 of its activities there and that Banker Trust makes it only 1/5 éme, this merger will allow this new " world company " to benefit from an important impact on its competitor. However it will not allow to create or to strengthen a dominant position in no relevant market. It explains why the European Commission let this merger be made: it is not really afraid of the monopoly or of the seizure of power in the financial domain of this new international group. [...]

[...] There is a modification of the balance of power between the managers and the shareholders. These last ones impose very high criteria of profitability to the leaders. The generalization of the groups' performances allowed the emergence of a standard of profitability, to my mind arbitrary, in the neighbourhood Thus the preservation of such rates of profitability imposes, except in sectors with an explosive competition, the appeal on the external growth. However these kinds of M & A are done in a short term strategy concerning the value creation. [...]