An acquisition bid is like any other proposal for risky investment. The difference arises due to additional source of risk arising from two different sources of information asymmetry due to private knowledge held by the bidder and target. We hypothesize that the bidding process evolves in a manner to optimize bidder's investment in the target through a process of joint signalling. Medium of exchange and bid premium are used as the two signal elements simultaneously by the bidder. We develop a multiple signalling model of the bidding process which is fully revealing in equilibrium.

The purpose of this study was to measure merger performance on a longitudinal basis using a micro perspective. Specifically, this study looked at the performance of a sample of mergers drawn from the food and kindred products industry, Standard Industrial Classification code 20, for a period of five years before and five years after the merger using two performance measures. The performance measures, namely market returns to stockholders and return on investment, have been used extensively in the literature to study the performance of mergers and acquisitions, albeit on macro samples. The study offered significant statistical support for the hypothesis that mergers benefit the acquiring firm and its stockholders, as well as for the hypothesis that merger performance in the latter time period of study (1977 to 1984) was better than in the former (1968 to 1977). However, no significant difference in performance was found across merger types. The study discussed the managerial implications of these findings and offered directions for future research in the area of merger performance.

This research is based on the premise that change management implementation is significantly related to employee engagement in post-merged organisations. The relationship between employee engagement and the demographic variables age and length of service, and variable change experience is also explored in the postmerged organisation. The study uses a quantitative design methodology to cover the objectives of the research and to answer the questions relating to the topics of the study. The sample was drawn from a mining industry within the private sector that has undergone a merger in the last five years. The sample for the study was selected using the convenience sampling method. Statistical tools that were used in this study included frequency analysis, measures of central distribution, t-tests, Friedman‟s test, and analysis of variance. The study found high levels of employee engagement in the dimensions emotional commitment and discretionary effort. The responses for the dimension intent to stay were above average while the response for rational commitment remained neutral. A significant difference was found between the levels of emotional commitment between the two merged companies. The extent of change management implemented differed significantly between the two merged companies. With regards to the demographic variables age and length of service and variable organisational change experience, no significant relationship was found with employee engagement. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

No abstract available. / Dissertation (LLM)--University of Pretoria, 2013. / gm2014 / Mercantile Law / unrestricted

The purpose of this research is to examine whether accounting methods for business combinations (purchase and pooling-of-interests accounting) have a different effect on firms' market value of equity in the combination year and thereafter. In particular, after the accounting method is no longer disclosed in the financial statements, does it have an impact on market value of equity of the combined firms because the accounting figures are different? A five-year period subsequent to a particular business combination is used because public companies are not required to disclose the details of the combination for more than three years after the effective date of the combination. This research, thus, tests whether market participants still take into consideration the accounting method of past business combinations when this information is no longer disclosed in the financial statements. In addition to the testing of the impact of the accounting methods, the value-relevance of goodwill amortization is investigated. The sample consisted of 100 U.S. business combination transactions during the period 1985–1995 (77 pooling firms and 23 purchase firms). The results do not indicate that market participants price pooling firms and purchase firms differently at the time of business combinations. The results, in addition, do not confirm that when the details of a particular business combinations do not appear in the financial statements, pooling firms' accounting figures have a more positive effect on security prices than those of purchase firms. It seems that market participant are able, even in the long term, to account for the accounting difference between purchase and pooling-of-interests. Also, goodwill amortization does not appear to be value relevant. / Ph. D.

The present thesis analyzes whether and - if so - under which conditions mergers result in merger-specific efficiency gains. The analysis concentrates on manufacturing firms in Europe that participate in horizontal mergers as either buyer or target in the years 2005 to 2014. The result of the present study is that mergers are idiosyncratic processes. Thus, the possibilities to define general conditions that predict merger-specific efficiency gains are limited. However, the results of the present study indicate that efficiency gains are possible as a direct consequence of a merger. Efficiency changes can be measured by a Total Factor Productivity (TFP) approach. Significant merger-specific efficiency gains are more likely for targets than for buyers. Moreover, mergers of firms that mainly operate in the same segment are likely to generate efficiency losses. Efficiency gains most likely result from reductions in material and labor costs, especially on a short- and mid-term perspective. The analysis of conditions that predict efficiency gains indicates that firm that announce the merger themselves are capable to generate efficiency gains in a short- and mid-term perspective. Furthermore, buyers that are mid-sized firms are more likely to generate efficiency gains than small or large buyers. Results also indicate that capital intense firms are likely to generate efficiency gains after a merger. The present study is structured as follows. Chapter 1 motivates the analysis of merger-specific efficiency gains. The definition of conditions that reasonably likely predict when and to which extent mergers will result in merger-specific efficiency gains, would improve the merger approval or denial process. Chapter 2 gives a literature review of some relevant empirical studies that analyzed merger-specific efficiency gains. None of the empirical studies have analyzed horizontal mergers of European firms in the manufacturing sector in the years 2005 to 2014. Thus, the present study contributes to the existing literature by analyzing efficiency gains from those mergers. Chapter 3 focuses on the identification of mergers. The merger term is defined according to the EC Merger Regulation and the Horizontal Merger Guidelines. The definition and the requirements of mergers according to legislation provides the framework of merger identification. Chapter 4 concentrates on the efficiency measurement methodology. Most empirical studies apply a Total Factor Productivity (TFP) approach to estimate efficiency. The TFP approach uses linear regression in combination with a control function approach. The estimation of coefficients is done by a General Method of Moments approach. The resulting efficiency estimates are used in the analysis of merger-specific efficiency gains in chapter 5. This analysis is done separately for buyers and targets by applying a Difference-In-Difference (DID) approach. Chapter 6 concentrates on an alternative approach to estimate efficiency, that is a Stochastic Frontier Analysis (SFA) approach. Comparable to the TFP approach, the SFA approach is a stochastic efficiency estimation methodology. In contrast to TFP, SFA estimates the production function as a frontier function instead of an average function. The frontier function allows to estimate efficiency in percent. Chapter 7 analyses the impact of different merger- and firm-specific characteristics on efficiency changes of buyers and targets. The analysis is based on a multiple regression, which is applied for short-, mid- and long-term efficiency changes of buyers and targets. Chapter 8 concludes. / Die Dissertation mit dem Titel 'Merger-specific Efficiency Gains' beschäftigt sich mit der Frage, ob und inwieweit Fusionen zu Effizienzsteigerungen der beteiligten Parteien beitragen. Die Analyse konzentriert sich dabei auf europäische Firmen im verarbeitenden Gewerbe, die im Zeitraum von 2005 bis einschließlich 2014 entweder als Käufer oder als Kaufobjekt an einer horizontalen Fusion beteiligt waren. Ergebnis dieser Dissertation ist, dass Fusionen einzigartige Prozesse sind. Allgemeingültige Aussagen hinsichtlich Zeitpunkt, Zeitraum und Umfang fusionsbedingter Effizienzgewinne sind daher nur bedingt möglich. Die Ergebnisse dieser Dissertation deuten darauf hin, dass Effienzgewinne als direkte Konsequenz einer Fusion möglich sind. Effizienzveränderungen können mithilfe einer Total Factor Productivity (TFP)-Methode gemessen werden. Signifikante fusionsbedingte Effizienzgewinne sind für gekaufte Unternehmen wahrscheinlicher als für Käufer. Desweiteren treten sie frühestens ab dem zweiten Jahr nach einer Fusion auf. Die Verschmelzung von zwei Unternehmen, die beide im gleichen Hauptsegment tätig sind, führt allerdings eher zu Effizienzverlusten als Effizienzgewinnen. Effizienzgewinne werden vor allem kurz- bis mittelfristig durch Veränderungen in den Material- und Personalkosten herbeigeführt. Insgesamt sind fusionsbedingte Effizienzgewinne eher von der Art der Firmen als von der Art der Fusion abhängig. Die Analyse der Gründe für fusionsbedingte Effizienzgewinne zeigt, dass Firmen, die die Information über die Fusion selber veröffentlichen, kurz- bis mittelfristig Effizienzgewinne generieren. Des Weiteren sind mittelgroße Käufer eher in der Lage Effizienzgewinne zu generieren als kleine oder große Käufer. Zudem zeigt die Untersuchung, dass kapitalintensivere Unternehmen häufig Effizienzgewinne nach einer Fusion generieren. Die Arbeit ist wie folgt strukturiert. In der Einleitung werden die Gründe für eine Beschäftigung mit der Frage nach fusionsbedingten Effizienzgewinnen dargelegt. Die Herausarbeitung von Faktoren, anhand derer sich der Zeitpunkt, der Umfang und der Zeitraum fusionsbedingter Effizienzgewinne bestimmen ließe, kann in der Praxis die Entscheidung für oder gegen eine Fusion erleichtern. Das zweite Kapitel beinhaltet einen Literaturüberblick über ausgewählte empirische Studien, die sich mit der Frage nach fusionsbedingten Effizienzgewinnen bereits befasst haben. Eine Studie, die horizontale Fusionen von europäischen Firmen im verarbeitenden Gewerbe zwischen 2005 und 2014 untersucht, liegt bisher nicht vor. Die vorliegende Arbeit leistet mit der Analyse von Effizienzgewinnen eben solcher Fusionen einen Beitrag zur vorhandenen Literatur. Das dritte Kapitel beschäftigt sich mit der Identifizierung von Fusionen. Die Fusionsdefinition entstammt der Europäischen Zusammenschlusskontrolle sowie den Richtlinien zur Bewertung horizontaler Fusionen. Anhand von Begriffsbestimmungen und festgelegten Kriterien schafft der europäische Gesetzgeber einen Rahmen zur Identifizierung von Fusionen. Im Fokus des vierten Kapitels steht die Effizienzschätzmethode. In empirischen Studien wird vorwiegend die TFP-Methode zur Schätzung der Effizienz eingesetzt. Die TFP-Methode bedient sich der ökonometrischen Methode der linearen Regression in Kombination mit einem Kontrollfunktionsansatz. Die Schätzung der Parameter erfolgt mit Hilfe der verallgemeinerten Momentenmethode. Die Ergebnisse der Effizienzschätzung gehen im fünften Kapitel in die Analyse fusionsbedinger Effizienzgewinne ein. Die Analyse erfolgt unter Zuhilfenahme der Difference-In-Difference (DID)-Methode und wird für Käufer und Gekaufte separat durchgeführt. Das sechste Kapitel beschäftigt sich mit einer alternativen Methode zur Effizienzschätzung, der Stochastic Frontier Analysis (SFA)-Methode. Vergleichbar zur TFP-Methode handelt es sich um eine stochastische Methode. Im Gegensatz zur TFP-Methode wird die Produktionsfunktion als Grenzfunktion und nicht als durchschnittliche Funktion geschätzt. So ist es möglich, Effizienz in Prozent auszudrücken. Es folgt im siebten Kapitel eine Analyse des Einflusses verschiedener fusions- und firmenspezifischer Faktoren auf die Effizienzveränderung bei Käufern und Gekauften. Die Analyse erfolgt mittels einer multiplen Regression und wird separat für kurz-, mittel- und langfristige Veränderung der Effizienz von Käufern und Gekauften durchgeführt. Im achten Kapitel folgt die Schlussbetrachtung.

This thesis investigates the role of financial advisors and their impact on their clients' short-term M&A deal performance. The examination of the extant literature on M&A advisors reveals a lack of focus on the target side of the equation. Therefore, the first topic is dedicated to the examination of the effects of target financial advisors' involvement and quality on their clients' short-term M&A deal outcomes. The findings reveal that targets that opt to hire an advisor are able to achieve better short-term deal performance, and that highly reputable target advisors are associated with higher premiums in all-cash deals. To add more clarity on the mechanisms through which target advisors contribute to the performance of M&A deals, I leverage a hand-collected dataset, from public targets' SEC filings, that covers the actual activities conducted by target advisors. The results of the analyses conducted show that target advisors add value through the provision of services relating to the evaluation of deals from a financial perspective, however, assigning them to the search/matching activities is associated with a negative effect on the premium achieved. Despite the abundant literature on the role of acquirers' financial advisors in M&A deals, findings on the impact of their involvement in such deals are rather inconclusive, and the bulk of research in this area is quite dated. Using the different ranking schemes developed, I re-examine this topic using a most recent dataset (2001 to 2017). I find that acquirers' financial advisors with stronger past performance are able to secure better short-term deal outcomes to their clients, and in line with Golubov et al. (2012), highly reputable acquirers' advisors deliver higher returns to their clients in public deals. The presence of an advisor (on the target or on the acquirer side) allows completing deals in a shorter period of time. This thesis covers, as well, the determinants of advisor hiring-related decisions regarding the reputation of the advisor selected. The findings reveal that, on the target side, there is a higher propensity to hire a highly-ranked financial advisor when the firm is being served by a Big-4 accounting firm, and in the presence of a larger institutional ownership base. On the acquirer side, firms are found to be more likely to hire a highly-ranked financial advisor if they face a higher litigation risk, if they are served by a Big-4 accounting company, and if they involve a higher institutional ownership base. The findings of this research project hold important implications both for businesses involved, through guiding their choice of advisor to assist them with their M&A deals, and for the academic research by offering a comprehensive analysis that incorporates a range of existing and newly developed proxies of quality, thus reconciling the inconclusive findings reached in the extant literature.

Being able to predict a merger or acquisition before it takes place could lead to an investor earning a premium, if they owned shares of the targeted firm before the merger or acquisition attempt is announced. On average acquiring firms pay a premium when acquiring or merging with a targeted firm. This study uses publicly available financial information for 7,267 attempted takeover targets and 52,343 non-targeted firms for the period January 3, 2000 through December 31, 2007 to estimate (using logit) predictive models. Financial ratios are constructed based on six hypotheses found in the literature. Although statistical evidence supports a few of the hypotheses, the low predictive power of the models does not indicate the ability to accurately predict targeted firms ahead of time, let alone with any economic significance.

No description available.

This study explores the influence of employee perception of acquisition success and the dispositional antecedents of positive affect and adaptive coping on employee- organization commitment during the 60-day period following a business acquisition. Allen & Meyer's affective, normative and continuance model of commitment was used for the dependent variables. A single sample was analyzed using a hierarchical regression approach. The survey was conducted with TRW's GIT Division, and included 51 employees who participated in three web- based surveys. The surveys were administered at (a) the change of control date, (b) 30 days, and (c) 60 days after the change of control date. Through a full- model regression, the combined dispositional and demographic variables were found to have a significant impact on the three components of employee- organization commitment. Specifically, the dispositional attribute of positive affect had a statistically significant predictive relationship to affective and normative commitment. Employee perception of acquisition success was found to have limited influence only on affective commitment, and finally, company service was determined to have a small predictive value for continuance commitment. The changing nature of the relationships between the independent variables and the dependents over time led to the conclusion that the employee sample was experiencing several symptoms of merger syndrome during the initial post- acquisition time period. As a single case, the study cannot be considered conclusive, however, the study does provide insights into the changing nature of employee- organization commitment during a specific time of organizational change. Research into additional dispositional antecedents to employee commitment is suggested, as well as further research on employee commitment after the initial 60-day post- acquisition integration period. / Ph. D.