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Essay / Research Paper Abstract
This 8 page paper looks at what mergers and acquisitions take place and consider who and why many will fail. By looking at the reasons behind the failures companies may be better placed to attain the potential benefits that are identified. The paper uses examples to illustrate the points raised. The bibliography cites 11 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEfailma.rtf
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Unformatted sample text from the term paper:
either a cost advantage or the advantage of differentiation. Once an advantage s obtained with will have a limited life so new advantages need to be sought. It is
the pursuit of these that many companies enter into mergers and acquisition, and it is the failure to realise the potential that causes the mergers to fail. There
are not the only reasons for mergers and acquisition, the desire to increase profits by increasing market share may be a push factor by the shareholders. To understand why there
are so many failures we need to look at the reasons mergers and acquisitions take place and how they fail. The philosophy behind
merger and acquisitions is that the total of the combined entity will be greater than the sum of its parts that existed before the merger (Pilloff, 1996). It is generally
perceived that the main gain of many merger will be due to increase in the performance in the post merger (or post take-over) company. This improvement in the performance of
the company may be achieved in several ways, usually centring around operational efficiency gains as a result of economies of scale or the acquisition of additional or superior skills or
technology (Pilloff, 1996). The efficiency gain may come due to management styles and usage. It is likely that the acquiring firm may have
management systems and abilities which are superior to that of the target which was acquired (Pilloff, 1996). Therefore the newly acquired target company may have its own performance improved
due to the application of the newer management techniques (Pilloff, 1996). This can result in a higher level of production utilising exactly the same resources as the pre-acquisition company.
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