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A Study of the Determinants of the Successful Mergers and Acquisitions
- 1 School of Accounting, Hangzhou Dianzi University, Hangzhou, 310018, China
* Author to whom correspondence should be addressed.
Abstract
As studies in recent Merger and acquisition (M&A) research, single determinant is preferred to be analyzed, while this report tend to divide factors into 4 determinants towards successful M&A. This report will analyze the determinants of synergy, valuation, cultural difference and policy with several actual cases to support the objectivity of the analysis. Initially, the effect of “1+1>2” is called synergy which can be split into operating synergy, management synergy and financial synergy that will enhance the coordination internally and attain extra market segments externally. Secondly, as the asymmetry of information, overestimates of valuation may generate unsuccessful M&A, for the goodwill is intangible and easy to be overvalued. Thirdly, the cultural difference in region, belief and corporate experience will impact on the M&A positively or negatively, for the uncertainty of cultural differences will increase the difficulty but also the opportunity in M&A. Lastly, different target company in different regions with different strategies might cause different results. In fact, the 4 determinants have internal relation. The enterprises used to prefer to expand the market or the scale in the industry by vertical M&A and horizonal M&A, but nowadays they tend to make a technical acquisition.
Keywords
Mergers and Acquisitions, Synergy, Valuation, Cultural Difference
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Cite this article
Lyu,R. (2024).A Study of the Determinants of the Successful Mergers and Acquisitions.Advances in Economics, Management and Political Sciences,110,187-193.
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Volume title: Proceedings of ICEMGD 2024 Workshop: Decoupling Corporate Finance Implications of Firm Climate Action
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