Managing the value chain of mergers & acquisitions

Abstract

The purpose of this thesis was to work out relevant case studies for the major processes in the merger & acquisition management phases. Chapter one evaluates the current market situation and investigates into country risk implications for M&A. Also a forecast scenario for the year 2008 is developed. Chapter two presents a literature review on mainstream M&A research with a profound critique from a practitioner perspective. An alternative mode of investigation is suggested due to severe limitations of public M&A research studies and stringent conclusions on shareholder value implications. Chapter three presents a comprehensive tool kit for cutting through complexity in cross-border deals to identify core value and its strategic potential. The importance of strategic due diligence is highlighted and a detailed framework for evaluation of mergers is provided. Chapter four presents best practice merger control procedure of the EU Commission. Based on recent merger control cases in industry, banking and telecommunications, executives are provided with a detailed reasoning and critique of the EU Commission merger control process. A solid merger control routine is developed to strengthen a successful communication between the involved parties. Chapter five discusses the main principles of corporate finance valuation of M&A transactions and provides an example to sharpen the valuation skills. Chapter six presents a profound discussion of tax due diligence and investigates into the optimal tax location. Further a detailed technical due diligence case shows the application of relevant instruments like experience curve effects, etc. The economical due diligence case study provides the output of more than 300 executive interviews from a banking merger scenario and a solid evaluation framework. In chapter seven the design of experiment in acquisition finance outlined the individual factors importance onto the development of the shareholder value. The study is unique in its approach and concentrates on the forecast of the equity growth of distinct M&A deals. The results are convincing and provide an alternative mode to mainstream M&A research. Not only are the traditional weaknesses overcome but also it is a promising and useful instrument that can be applied in practice of private equity firms and/or investment banks. Also, the traditional fallacies with IPOs are addressed by demonstrating the weak long-run performance of a concrete biotechnology firm IPO. Chapter eight presents two selective and very important issues in post-merger integration of M&A: purchase accounting and management of incentives.<br />