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The overall objective of the study was to determine the financial characteristics of companies involved in merger activity. More specifically, the study aims to determine: (a) whether acquired companies possessed financial characteristics similar to previous failed companies (the 'failing-company' hypothesis); (b) whether acquiring companies possessed financial characteristics similar to previous failed companies and (c) the impact of acquisition on the post-acquisition performance of acquiring companies, and particularly to consider whether their performance differs according to the financial characteristics of the companies they acquired. A new "bankruptcy prediction" model, contemporary with the acquisition data, was derived, tested for robustness, and applied to samples of acquired and acquiring companies. An indirect test of the 'failing-company' hypothesis was carried out by comparison with the results obtained on application of the model to control groups of non-acquired and non-acquiring companies. The test indicated that a higher proportion of acquired companies possessed financial characteristics similar to failed companies than the control group of non-acquired companies. This evidence tends to support the 'failing-company' hypothesis as a motive for mergers for acquired companies. Conversely, there was no such evidence in support of the hypothesis for acquiring companies. The approach adopted also allowed the dichotomy of acquired companies (failing vs. non-failing) which made it possible to test for differential post-acquisition performance of the acquiring companies. In order to evaluate the post-acquisition performance of acquiring companies, three different measurement criteria were adopted. They were: (a) accounting-based profitability and gearing ratios (b) industry-standardardised profitability measure (Meeks (1977)) and (c) performance analysis-scores (PAS-score) (Taffler (1983)). The results indicated that the acquiring companies generally incurred a decline in their post-acquisition profitability measures, while they increased their gearing ratios. Generally, the group acquiring potentially failing companies exhibited 'superior' post-acquisition performance compared with the group acquiring "non-failing" companies. These findings support the managerial motives for mergers since there appears to be little evidence that mergers are undertaken to increase profitability as implied in neoclassical motives. They also suggest the possible need for a review of public policy towards mergers; perhaps mergers ought to be encouraged only if they prevent impending bankruptcy by the acquisition of failing companies.

M.Com. (Business Management) / Please refer to full text to view abstract

Purpose: The purpose of this thesis is to explore how to manage the potential challenges organizations may face in the consolidation phase, and in order to achieve this, potential challenges need to be identified. Methodology: The research has been performed through an abductive case study method to the subject of change management. The empirical data was gathered from semistructured interviews conducted at an international company, Company X, primarily from the electronic commerce department. The authors used a thematic analysis inspired by Boyatzis (1998) when analyzing the data. Research Limitation: Due to the limited amount of time, the research is limited to only embrace the consolidation phase of an organizational change process. The case study includes 10 interviews from one organization, which will limit the research. The authors apply anonymity due to the company's desire; however, it is also done in order to protect the respondents from any possible harm that might derive from this study (Waldorf,2006). Theoretical Perspective: Literature covering different but highly related areas of change management, and its relation to the consolidation phase constitutes the theoretical foundation of the thesis. Results: The authors identified four potential challenges when consolidating change; communication, prioritize consolidation, policies and employee involvement. Conclusion: In order for organizations to successfully manage the four identified challenges they have to increase the flow of communication, prioritize the consolidation phase, and thereby also allocate resources, which enables the employees to consolidate changes, set up clear policies for the consolidation phase and involve the employees within all levels, in order to increase the employee motivation.

Mémoire numérisé par la Division de la gestion de documents et des archives de l'Université de Montréal.

Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2013. / This study re-examines post-acquisition performance of acquiring firms in South Africa using Economic Value Add (EVA). Investigation of the 336 acquisitions occurring during 2000 to 2011 reveals that acquiring firms experience significantly deteriorating EVA after the completion of acquisitions. Further, this study evaluates the performance of other traditional accounting measures including Earning per share (EPS), Return on capital (ROC), Return of Assets (ROA) and Return on Equity (ROE) post acquisition. The results suggest that acquiring firms tend to experience slightly improved performance after completion of the acquisitions when using traditional accounting measures. But the improved operating performance is wiped out by capital costs of the large premiums paid to the target firm, creating no real economic gains to the acquiring firm‘s shareholders

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in Finance and Investment, June 2016 / This study examines long-term performance of publicly-listed South African acquiring firms that participated in Merger and Acquisition transactions. In an effort to close the gap in South African literature of long-term M&A performance, the study used key financial ratios in calculating the change of financial position before and after each M&A transaction or in other words, before and after the 2007 recession. The sample included 10 acquiring companies that performed 18 acquisitions during the period, 2007 and 2009. Subsequently, accounting performance in the form of Profitability, Efficiency, Liquidity, Leverage/Solvency and Investment ratios, were then analysed three years before and after each M&A transaction. Furthermore, the Paired Comparison Test was used to test for significant differences in ratios, between pre- and post-M&A performance of each acquirer. The results suggest that overall, Mergers and Acquisitions do not significantly improve financial performance of South African acquirers after each M&A transaction. / GR2018

Mergers and acquisitions (M&As) of private target firms is a common phenomenon and being acquired is the desired outcome for some private firms, as it is the path to wealth creation for these firm’s owners and investors. However, this M&A type has received limited attention in the literature, especially from the perspective of the target firm. Furthermore, neither a theoretical model to explain the phenomenon where the goal of the target firm is to be acquired in M&A, nor an indicator to gauge wealth creation for such firms were identified in the review of the literature. This paper established that, because being acquired in a M&A may be the goal, the wealth generated from the M&A is the outcome or performance indicator for such firms. The outcomes of M&As depend, among other factors, on the acquiring firm’s perception of the target firm’s value. Thus, this paper coined the term ‘private firm’s attractiveness as an acquisition target’, and built on the resource based view of the firm and signaling theory to identify factors that influence a private firm’s attractiveness to acquirers. Furthermore, private firm’s attractiveness as an acquisition target was used as the bridge between the acquiring firm perspective and target firm perspective in a M&A. The resource-based view of the firm and the signaling theory were used jointly in building the theoretical framework for hypotheses development. Hypotheses were tested using a sample of 222 acquisitions of US private target firms by US public acquiring firms. Hierarchical regression with inverse mills ratio, as well as two-step Heckman model were used to address the potential selection hazard. Results provided strong support for most hypotheses, and showed that investor involvement, target firm’s industry innovativeness, and target firm’s emphasis on growth in human capital were positively related to the private firm’s attractiveness as an acquisition target. Furthermore, the effects of emphasis on growth in human capital were stronger when the target firm’s growth in revenue was lower and when the target firm operated in a more innovative industry. The effects of emphasis on growth in revenue were stronger when the target firm operated in a less innovative industry. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2018. / FAU Electronic Theses and Dissertations Collection