Do Mergers and Acquisitions Create Shareholder Value

Normally, revenue, economies of scale are incentives that drives M&A activity to spread it operations. Key factors that will drive financial planning process for post mergers in the health sector depends on ‘soft factors’ such as vision, planning,

The company is so large that no one drug can lift it from its current sales doldrums. In addition, the company was once highly attractive to investors, but its recent stock price fell to 1997 lows. This may put pressure on the company to attempt acquisitions at a time when the company is ill-equipped to integrate a new company into its organization, and it is engaged in a cost-cutting program at a time when it may need to invest even more in research and development (McTigue Pierce, 2005).

Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.

In this paper, I begin by describing and assessing the different criteria financial analysts within Fortune 500 companies use to evaluate merger success and acquisition rationale. I also discuss what these strategies can imply about the sources of gains and losses on each company’s stock price, and the factors that drive merger success in the long run. I then discuss the firsthand evidence of this merger and acquisition by examining transaction details from both parties and transitioning into an analysis of CB&I’s strategy for post-merger integration. Finally, I discuss the implications of

Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.

It is evident that there has been an increase in merger activity over the past few decades around the world and according to Peacock and Bannock (1991) the lure of mergers to be a way of expansion and it can be represented in few main points that motivate the activity.

In our days mergers and acquisitions are a predominant feature of the international business system as companies attempt to exploit new market opportunities and to strengthen their market positions. Each year sets a new record for the total value of mergers and acquisitions and nearly every day new announcements are made in the business newspapers.

When commercial and manufacturing aspects need to be rationalized, the regulatory affairs (RA) function must adopt a leadership role in cross functional projects, to ensure their companies are compliant in aspects ranging from notification of site changes and product branding to the transfer of marketing authorizations and harmonization of drug formulations. This article discusses the issues and potential pitfalls of which the RA professional should be aware, and explains the need to espouse a leadership position in such

Pharmaceutical companies spend 15 to 20% of their sales on R&D and finance 99% of their

Research has shown that the magnitude of wealth effects due to acquisitions and divestitures are related to the size of restructuring event (Mulherin & Boone, 2000). Another idea discussed is that divesting firms are generally larger than industry counterparts.

This brings me to the importance of acquisitions in Businesses. Acquisitions done at the right time can turn around the fortunes of any enterprise. For Example, Founded in 1911, the rapidly growing Swedish pharmaceutical company Pharmacia, showcased its first demonstration of market power with the purchase American rivals Upjohn in 1995 and Monsanto less than five years later. During that time Monsanto, had been developing the anti-inflammatory drug known as “Celecoxib”, which had been eyed by Pfizer during its development stages. Beaten to the punch by Pharmacia, the American Pfizer announced the purchasing deal of Pharmacia as a whole in July 2002 with the transaction tag of $60bn (U.S). Less than seven years later Pfizer would agree to purchase rival Wyeth for approximately $68bn (U.S). Today, Pfizer Inc. is worth as much as twice its value at $172bn (U.S). Taking another example, at one point Bank One Corp was the sixth largest bank in U.S.It was the first of many dominions that would be purchased by the millennials new born that is J.P Morgan Chase. After a string of successful mergers on its own, including its own consolidation of Chicago Corp and the National Bank of Detroit, Bank One’s buying

While there are many existing literatures that examine how payment methods in takeovers would affect stock returns and how M&A would affect acquires’ beta in the stock market, there has been no examination of the direct link between payments methods of M&A deals and the changes in acquiring firms’ beta since takeover announcement by different way of financing would have different debt-equity ratios which would impact on betas. Therefore, using M&As within the US market during 1990-2011, this paper aims to fill the gap and examine the performance of stock returns and firm-level betas based on different payment methods before and after M&A announcement and listed effect of targets with the use of updated data.

M&A are often conducted for the strategic advantages that it entails such as improvements in efficiency, performance as well as synergistic gains (Junior et al, 2013). The potential source of synergies motivates firms to engage in M&A where they believe the value generated from this strategic combination exceeds the respective individual firm value if they were to operate independently (Duksaite and Tamosiuniene, 2009).

9 The Impact of Cross-Border Mergers and Acquisitions on Financial Analysts’ Forecasts: Evidence from the Canadian Stock Market

Mergers and acquisitions involving billions of dollars have become a common phenomenon in the business world in an attempt to face a number of challenges, such as external market downturn, market restriction, and internal unsystematic management of the labors (Child et al., 2001).