The latest surge of corporate mergers has been characterized by a steadily increasing rate of conglomerate combinations. It would appear that one of the prime motivating factors in conglomerate merger is a firm belief in the principle of "synergism," or the mutually cooperating action of separate substances taken together to produce an effect greater than that of any component taken alone. It would also appear that in such instances wherein there is no direct relationship in regard to raw material source, product development, production technology, or marketing channels, the principle of synergism is not automatic, but must be implemented by appropriate management action. The hypothesis of the study is that the goal of achieving synergism through centrality of management influence has not yet become a reality in conglomerate business organizations as a group. It is the purpose of the study to investigate the degree of centralized management development in a number of management functions and relate this development to success in selected performance areas.

This dissertation is a growth options analysis of high tech mergers. I analyze the impact growth options have on the likelihood of a high tech firm being acquired, the premiums paid for these acquisitions, and the synergies that result from these mergers. I examine how proxies for growth options interact with those for the resources needed to fund growth. A significant part of my analysis involves developing and examining a new growth options proxy, Gamma, the return on investment a firm realizes in growth options value from its R&D expenditures. I find that firms that are better than their peers in converting R&D into growth options value, i.e. they have high Gamma, are more likely to be targeted for acquisition than low-Gamma firms. The premiums paid are impacted most by the characteristics of the deal, primarily when deals are competitive, and GDP growth. The acquirer's Gamma, however, is very significant in predicting premiums. Acquiring firms with high Gamma pay significantly lower premiums. The synergies that result from a merger are measured in short and long run returns, and most mergers result in value destruction to the combined firm. In the fewer than 20% of the mergers that resulted in positive long run abnormal returns, the premium paid and whether the deal was competitive significantly reduced the returns. However the two characteristics that significantly increased returns were the acquirer's Gamma and if the acquirer and target had complementary characteristics for growth options levels and free cash flow. / by Sean M. Davis. / Thesis (Ph.D.)--Florida Atlantic University, 2011. / Includes bibliography. / Electronic reproduction. Boca Raton, Fla., 2011. Mode of access: World Wide Web. FboU