Evaluating Companies for Mergers and Acquisitions

by Pervez Ghauri (Editor), Ibne Hassan (Editor)

Overview

Mergers and acquisitions are one of the cornerstones of firm growth, and have attracted considerable attention from the scholarly research community in the last three decades. Several studies have concluded that M&A transactions do not result in better performance, and can even erode the acquiring firm's shareholder value to produce highly volatile market returns. Others have identified reasons for such inefficiencies. However, very little attention has been given to business evaluation process as an influencing factor. This thirtieth volume in the acclaimed International Business & Management series investigates how the processes involved in the evaluation of a target firm influence the outcome of M&As. Co-authored by international business expert Pervez Ghauri, it highlights the processes that should be followed to evaluate potential acquisition targets, and how a proper evaluation can influence the M&A performance. It encourages greater reliance on the strength and independence of the business evaluation process, and brings clarity in understanding the relationship between different components of business evaluation.

Product Details

ISBN-13:	9781783506224
Publisher:	Emerald Group Publishing Limited
Publication date:	06/04/2014
Series:	International Business and Management , #30
Pages:	200
Product dimensions:	5.98(w) x 9.02(h) x 0.91(d)

Table of Contents

List of Tables vii

List of Figures ix

About the Authors xi

Preface xiii

1 Introduction 1

1.1 Scope of Research 2

1.2 Empirical Evidence 4

2 Significance of Mergers and Acquisitions 5

2.1 Extant Literature 5

2.2 Recent Trends 6

3 Concept of Mergers and Acquisitions 19

3.1 Modes of Mergers and Acquisitions 19

3.2 Varieties of Mergers and Acquisitions 24

4 Business Evaluation and Mergers and Acquisitions 31

4.1 Selection of Target Firm 33

4.2 Valuation of Target Firm 39

4.3 Performance Assessment 51

5 Mergers and Acquisitions Failures 57

5.1 Literature on Mergers and Acquisitions 57

5.2 Research on Mergers and Acquisitions Performance 60

5.3 Business Evaluation and Mergers and Acquisitions Performance 67

5.4 Approach Applied on Research Area 71

5.5 Framework for Business Evaluation 73

6 Research Design 75

6.1 Data Collection 76

6.2 Case Study Methodology 76

6.3 Case Selection 76

6.4 Interviews 77

6.5 Data Analysis 79

6.6 Analysis Criteria 80

7 Empirical Evidence 83

7.1 Case 1: Acquisition of ITCo by TEL Group 83

7.2 Case 2: Acquisition of GV by NZ 96

7.3 Case 3: Merger of TM and SP 108

7.4 Case 4: Afone Acquisition of Tfone Business in Italy and Spain 120

8 Comparative Case Study Analysis 143

8.1 Consolidated Analysis 143

8.2 Analysis of Selection of Target Firm 145

8.3 Analysis of Valuation of Target Firm 148

8.4 Analysis of Performance Assessment 151

9 Discussion and Conclusion 157

9.1 Background 157

9.2 Conclusion 162

9.3 Theoretical Contributions 166

9.4 Managerial Implications 167

References 169