Théories des fusions-acquisitions et des offres publiques d'achat

Résumé du document

Why does M&A occur or what is the strategy for M&A?
From an extremely theoretical point of view, companies seek to merge or acquire because they find it easier or faster than building or developing the same activity or asset. The M&A decision is transformed into a "make or buy" decision.
For example, if using Porter's approach, a company decided a particular industry was attractive it may chose to enter the industry by acquisition to leap down the experience curve, overcome a barrier to entry by acquiring it or acquire brand equity rather than developing it.

Extraits

[...] For the folk at the top, running a company can be dull. Organic growth, in a mature market, is grindingly slow. Doing deals is easier and much more exhilarating. Hire a bunch of investment bankers and set them to work. A chief executive spends perhaps five years in the top job: the surest way to make a mark in so short a time is to buy something big. Quite apart from the surge of adrenalin, it brings the gratifying attentions of investment bankers, and makes a splash on the financial pages. [...]

[...] Identifying a target company in the same industry that serves a geographic area that your company does not currently reach. Increased customer base. Finding a target company that could increase or broaden your customer base. Acquiring key management or other personnel. Identifying a target company with strong management talent to help your team succeed. New distribution channels. [...]

[...] A firm as identified a new market different from its current portfolio. Often a conglomerate strategy Respond to changes in the competitive landscape. Companies frequently feel compelled to combine forces to meet challenges they feel they cannot tackle alone. M&A strategy can combine several of the above goals. < number > Reasons for M&A Economies of Scale It is worth clarifying the idea of economies of scale Increased capacity of production or processing leads to lower unit costs Average costs decline with larger size with the notion that there is a minimum size or barrier to entry With larger size or capacity comes the idea of standardization in product so there is a trade-off between customization and standardization A natural economy of scale occurs in holding of inventories when demand is subject to random influences Having large numbers implies less exposure to micro variations Inventory management has been the explanation for many retail mergers Economies of scale also appear when large firms are more able to implement specialization Firms of large scale might be able to have specialized production groups performing a specific task One such task is specialized managers or researchers < number > Reasons for M&A Economies of Scale Economies of scale (continued) Of note when looking at economies of scale, is that some horizontal mergers in large fixed cost industries are for the purposes of reducing capacity Economies of scope is different from economies of scale Economies of scope enable a firm to produce related additional products at a lower cost because of experience in existing products One example is the pharmaceutical industry who has developed expertise in R&D or in marketing < number > Reasons for M&A Improve Company Management Mergers can occur as a result of outside managers having a better strategy for a firm's assets The takeover boom of the 1970s-80s was largely fueled by opportunities where the break-up value of a firm was greater than its current value Investors could purchase the firm and sell of assets and make a higher profit than the going concern This situation is similar to a firm who has strong cash generating assets and a lack of investment projects with NPVs high enough to warrant investment Outside management could spot such a situation and attempt to unseat current poorly functioning management. [...]

[...] Finding a target company with sophisticated marketing or supply chain operations in place so you can better or more economically distribute your goods or services. < number > Reasons for M&A Other stated goals Achieve cost savings and efficiencies. These are achieved through workforce reductions, economies of scale, sharing resources across products and instituting more effective cost controls in the combined company. Deregulation or the relaxation of government barriers. Market opportunities are opened during deregulation often in a environment where the incumbent or ex-monopoly is not competitive. Enter a new market. [...]

[...] The M&A decision is transformed into a “make or buy” decision. For example, if using Porter's approach, a company decided a particular industry was attractive it may chose to enter the industry by acquisition to Leap down the experience curve Overcome a barrier to entry by acquiring it Acquire brand equity rather than developing it < number > Reasons for M&A Often stated M&A goals: Product extension. Identifying a target company that offers a slightly different, but related product so you can extend your market presence. [...]