Documente Academic
Documente Profesional
Documente Cultură
WHY MERGERS
FAIL
OBJECTIVES
1 Introduction
Princes Royal
Carnival
Cruises Carnival
A break-up fee of
$40 mil
Hostile offer
A hostile stock and cash
bid worth around $3.5 bil Shareholders
United
US Airways
Airlines
7/2001
Priorities change;
Some areas cannot, in fact, be implemented;
Resources are withdrawn;
Cost limits are reached before full implementation
has been achieved;
Major unforeseen cultural issues arise.
Example of Long-Term Integration strategies
3. Merger Failure drivers
3.4.3. Multiple Acquisition and Lack of Control
Key people may go during the M&A. there are three primary
phases when people might leave a merging company. These
are: Announcement, Negotiation and Deal, Complementation
The asking price itself is usually set by the market, as the VCA
benefits may be perceived differently than from the acquirers
viewpoint. The stand-alone value is the value determined by
standard financial appraisal and due diligence techniques
3. Merger Failure drivers
Therefore:
Value created for A = max purchase price price paid for target
Integrative failure.
Inappropriate approaches to integration.
Management team selection and project management.
Change experience and flexibility.
4. The Development of a Process Model
Leadership failure.
Inappropriate leadership style.
Inappropriate teambuilding.
Employee acceptability.
Communication
6. Rules for Avoiding an Unsuccessful Merger
List of general rules for avoiding unsuccessful mergers and
acquisitions. they certainly do not apply in all cases, they do
however give an indication of the most common important areas
to avoid.