<p>The first essay of my dissertation introduces a new method for eliciting market beliefs about the expected outcomes of a merger negotiation after announcement. During a merger negotiation, the market prices of the firms involved</p><p>reflect beliefs about their values both in the merged and</p><p>standalone states, as well as the likelihood of either outcome.</p><p>These beliefs determine stock price reactions to news of a possible</p><p>merger, but those prices alone do not contain sufficient information</p><p>to identify the latent beliefs that they reflect. I develop a new</p><p>method which, by using additional data in the form of option prices,</p><p>is able to identify these beliefs. This method allows for a clear</p><p>decomposition of a negotiating firm's expected value change into two</p><p>parts: the value of the transaction to the firm, and new information</p><p>about its standalone value. Previous research into estimating</p><p>merger synergies has struggled to obtain an appropriate alternative</p><p>against which to measure the realized outcome. The market's beliefs</p><p>about state-contingent firm values give an estimate of both. Through</p><p>a direct comparison of the estimates of a firm's value in both the</p><p>merged and standalone states, I obtain a strong, practical measure</p><p>of the expected value-creating potential of a merger before its</p><p>consummation.</p><p>The second essay applies the state-contingent payoff estimation method developed previously to addressing questions about the size effect in mergers. A growing body of evidence indicates that large acquisitions destroy value. However, we do not yet know why. Several theories have been advanced, but their effects are difficult to observe in isolation. It has thus been impossible to tell whether negative post-announcement acquirer returns are caused by market expectations of value-destroying acquisitions or revealed bad news about standalone value. This paper resolves this issue by decomposing expectations about merger outcomes into expected value change from completing the acquisition and revision of beliefs about standalone firm value. The data show that deal size is correlated with value destruction, while acquirer size is correlated with release of unfavorable information. Deal size correlates with value destruction, acquirer size with bad news about the firm. Furthermore, the results suggest that overpayment is a prerequisite for large acquisitions. These findings reduce the set of possible theoretical explanations for the size effect.</p> / Dissertation

The paper and pulp industry saw an increase in the number of mergers in 1980s and 1990s. There had been consolidation of a number of smaller companies into larger corporations, which have greater management, financial, and marketing power. This merging trend has resulted in a fewer number of firms and an increasing concentration in the industry. Although the number of firms has decreased, the total industry capacity has been increasing. The combination of these interesting factors has motivated the topic of this masters thesis. The primary purpose of this research is to explore the factors that positively influence a firms decision to vertically integrate into producing its own pulp.

e-Learning has been developed for a decade in Taiwan, where rapidly kept pace with advanced countries. Many industries create e-Learning best practice and become benchmark in a leading way in Greater China. Taiwan government plays a critical role to support digital learning development through counseling, project import, quality certification system, technology transfer and R&D subsidies. In this study, the author who has been a technical worker in an e-Learning company for years observes its development and improvement to analysis the key points in each stage of development. Furthermore, the case study is about the integration of group enterprises and its strategy corresponds to each stage to research the future of digital learning industrial chain development. The e-Learning industry is both competitive and cooperative. Every company¡¦s products are competing, but they also need to integrate with each other before they can offer clients the solutions and right services. Therefore, the study focuses on whether the group enterprises take advantage of its industrial value chain integration to raise the position and compete with the other companies to make the maximum performance. There is also hoped that the results of the study will provide the reference of success possibility for digital learning or new industry.

Recent years, global steel industry has become oversupply caused by economic recession of the world, and lots of steel makers suffered serious deficit. In order to improve the business performance or create the conglomerate synergy, many decisions of mergers and acquisitions rose all around the world. It happened seldom for Taiwan¡¦s small and medium-sized enterprises to adopt the strategy of mergers and acquisitions. However, due to globalization, deregulation, and operating capital accumulation in Taiwan¡¦s business, it becomes a strategy of fast-growth for enterprises to adopt mergers and acquisitions. Unfortunately, very few cases of mergers and acquisitions are adopted in Taiwan¡¦s steel industry except China Steel Co., Ltd (CSC). On the other hand, it may be an opportunity for Taiwan steel industry to improve its structure, to reinforce its management constitution, to create production synergy, to pursuit quick growth, and to build its competitive advantages by the strategy of mergers and acquisitions since there is a great demand of steel for Mainland China market. The research uses the method of case study and deduces to a generalized model of enterprise¡¦s mergers and acquisitions theoretically, and induces with individual facts to analyze the secondary data of steel industry and the interview data of case with exploratory qualitative research. The case study of CSC merging Yieh Loong enterprise tries to find the strategic goal, motives, and have a further exploration about the execution process of mergers and acquisitions, the discussions which manage the performance, such as raw materials, marketing, financial affairs and human resources after merging, in order to analyze the reasons of its success or failure, and build to construct out the management style that the suitable steel industry merges. This research tries to build the steel industry's optimum model of mergers and acquisitions, and propose that the global steel industry is under the trend of the regional economic and trade integration, causing the globalization overall arrangement management tactics. The best market-Mainland China that has become Taiwan and global steel industry carried on the alliance or merged in addition. The case that China Steel Co. merged Yieh Loong Enterprise can be a good example for Taiwan steel manufacturers to carry on the growth strategy that maintain its internal competencies and resist foreign aggression.

In this paper we investigate the relation between corporate governance mechanisms and performance of financial holding companies (FHCs). We find that irrecoverable loans will affect the accuracy of FHCs¡¦ performance. So we remove the factor of bad debts and use this new performance proxy. In addition, we investigate the difference of corporate governance mechanisms between the FHCs that have subsequently merged other banking firms and those that haven¡¦t. The results are as following. (1)The financial performance of FHCs and corporate governance mechanisms We find that the coefficients for the institutional investor ownership and board size are negative and statistically significant. This result is consistent with Pound¡¦s (1999) strategic alignment hypothesis and with Jensen (1993), Lipton and Lorsch (1992). However, the coefficients for the managerial, governmental ownership, and supervisor size are not statistically significant. When we investigate the 7 better FHCs as another samples. The coefficient for the governmental ownership is negative and statistically significant. We believe that the governmental ownership will make the firms conservative and is not good for company. (2)The subsequent mergers and corporate governance mechanisms The FHCs that have subsequently merged other banking firms have higher level of the managerial and institutional investor ownership, but less number of board size and supervisor size than those that haven¡¦t. But there is no difference in the governmental ownership. The findings are consistent with Amihud and Lev (1981) and Roll (1986). They believed that mangers will make money or non-money profit during merging and institutional investors will cooperate with managers to avoid the conflict of interest between them.

Mergers and acquisitions (M&As) are one of the most important strategies for pharmaceutical and the biotechnology industry to gain access to valuable technological resources in recent years. The M&As activities and outcomes of famous pharmaceutical company ¡V Roche, and biotech leading company ¡V Genentech were investigated in this study. Thus, the innovation, product pipeline and financial performance were examined to elucidate the crucial strategies of M&As. Nowadays, the challenges of pharmaceutical company includes the growth rate of research and development (R&D) cost were higher than sales¡¦, new drugs development were slower than industry demand, licensing from other company and high profit patent drugs turned into generics. By innovative and vigorous development of biotechnology, biotech companies were devoted into niche products includes nucleic acid or protein drugs. However, large R&D expenditure and high risk product development result in capital shortage problems. The abundant working capital and well-experienced manufacture, marketing and sales characteristics of big pharma enable the M&As of pharma and biotech arise. This study case describe the M&A of an over a century pharmaceutical company ¡V Roche with a first IPO biotech company ¡V Genentech. To survey the process of licensing, merger, acquisition and public offerings, the motivation, strategies and outcomes were examined. In 2006, over the half of top ten sales of Roche were derived from Genentech; therefore, the global marketing and brand value of Roche contribute Genentech into the top one market value biotech company. The synergistic effect seems the M&A is a perfect integration. However, the majority equity owned by Roche and the oversea sales licensing to Roche were the further underlying problems for Genentech to expand to the top health care company in the world. The development of pharmaceutical company becoming more concentrated that the top ten pharmaceutics account for half of the global sales. Moreover, with the growing demand from the health care, aging and novel therapeutics and under the threatens of health insurance payment and patent drug expired, the tide of M&As for pharmaceutical and biotech companies will not decline. The weakness of Taiwan pharmaceutics is poor in innovation and generic drugs-oriented manufacture; furthermore, the biotech industry is still beyond maturity. Under the waves of M&As, the Taiwan pharmaceutical and biotech industry may prompt development by M&As. In this case study, the pharmaceutics and biotech background were first introduced and the case history, M&A process and strategies, product portfolio, R&D and financial issues were explored. Therefore, this study may fulfill and provide some suggestions and references for further pharmaceutical and biotech M&A activities in Taiwan.

I examine the market reaction to merger announcements and the long-term post-merger stock price performance of newly merged firms. For a sample of 484 acquiring firms completing mergers between 1993 and 2000, the average value-weighted abnormal announcement date return (market-adjusted) is a statistically significant -1.02%. On average, this reaction is more negative for firms with "good governance." Specifically, a governance index comprised of three governance variables is significantly negative in a multivariate regression of announcement date abnormal returns. Comp is the percentage of CEO salary consisting of equity incentives (including stock options and restricted stock grants), InsideOwn is the percentage of the firm owned by officers and directors, and InstOwn is the percentage of the firm owned by large outside block shareholders. Value-weighted calendar-time portfolios consisting of the full sample of acquirers exhibit significant abnormal returns of 9.12%, 33.84% and 55.8% for the 12, 36 and 60 months following the merger, respectively. This overperformance is limited to the value-weighted portfolios. There is calendar-time evidence of abnormal performance for some subsamples on a risk adjusted basis. However, when compared to a control group, abnormal performance is limited to large glamour acquirers on a 12-month horizon, large cash acquirers on a 36 and 60-month horizon, and small focusing acquirers on a 60-month horizon. Multivariate analysis of long-run returns reveals that use of equity and corporate diversification are associated with lower post-merger performance. With regard to governance and long-run stock returns, there is also evidence that suggests higher levels of incentive compensation for CEOs is associated with more successful merger transactions for long-term investors.

Based on social identity theory, self-categorization theory, and justice theories, this study proposed a theoretical framework for studying the psychological processes that employees go through during the period of post-merger implementation. Specifically, this study investigated: (a) the effects of HR practices on employees' intergroup cognition and perceived fairness; and (b) the antecedents and consequences of intergroup cognition (e.g., "us" versus "them" cognition) during post-merger implementation. In addition, I examined the mediating role of intergroup cognition in the psychological process. In Study One, a scenario-based experiment with MBA students, I found that more favorable HR practices after a merger led to a significantly higher level of distributive justice than less favorable post-merger HR practices. Furthermore, more favorable HR practices after a merger led to a significantly lower level of intergroup cognition than less favorable post-merger HR practices. In addition, equally favorable HR practices between the members of two groups in the merged company led to both a significantly higher level of distributive justice and a significantly lower level of intergroup cognition than HR practices that were less or more favorable as compared to those of the other group. In Study Two, a field survey with incumbents, I found that the level of perceived fairness was negatively related to the level of intergroup cognition. In addition, the level of perceived cultural differences was positively related to the level of intergroup cognition. Also, their effects on organizational commitment, resistance to change, and turnover intention during post-merger implementation were mediated by intergroup cognition.

<p>Syftet med den här magisteruppsatsen är att undersöka hur tillkännagivandet av företags-förvärv påverkar aktieavkastningen på ett uppköpande bolaget. Testet är begränsat till före-tag som enbart är listade på Stockholmsbörsen under perioden 1996 till 2005. För att testa onormal avkastning användes marknads modellen. Resultatet visade att tillkännagivandet av företagsförvärv har en signifikant effekt på avkastningen för aktien för det bolag som ska förvärva. Majoriteten av uppköpande bolag upplevde en negativ onormal avkastning under test perioden (100 dagar före tillkännagivandet och 100 dagar efter).</p> / <p>The purpose of this master’s thesis is to examine the effect a corporate takeover an-nouncement has on share prices for acquiring companies. The test will only involve com-panies listed on the Stockholm Stock Exchange during the period 1996 to 2005. To test the effect an announcement has, abnormal return for a period before and after the takeover announcement was calculated. The findings from the testing showed that takeover an-nouncements have a significantly impact on shareholder return. The majority of acquirers in the sample had negative average abnormal returns during the event period (100 days prior to the announcement and 100 day after).</p>

Zugl.: Darmstadt, Techn. Univ., Diss., 2009