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.

<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

Thesis (doctoral)--Universität St. Gallen, 2003.

In this study the effect of mergers and acquisitions on the wealth of shareholders is investigated by a case study method. The merger between Abraxas Investment Holdings and AST Ltd to form AST Group Ltd is investigated to establish any form of gains accruing to the shareholders whether abnormal or otherwise as a result ofthis merger. Two methods have been used to undertake this exercise namely the Stock Price Analysis and the Accounting data method. The accounting data method depicts an improvement in the post merger performance of AST Group Ltd as indicated by increases on the ratios such as Revenue; ROE; NAV and EPS. Improvement on these ratios has been interpreted as inferring an improvement on the "alue of the shareholders wealth. On the other hand the stock price performance analysis depicts two scenarios. Shareholders do experience some abnormal gains in the period leading to the merger as measured by increases in the share prices ofmerger companies. In the post merger period the price of AST Group Ltd Share declines unabated thus signaling a drop in the value of shareholders wealth. This has also resulted in incessant decline in PIE ratios in the post merger period. It has been concluded from this study that ifthe results of the investigation as outlined above are anything to go by then shareholders have not reaped the best possible results from this merger. AST Group Ltd has huge potential and capacity to afford its shareholders the best returns both in terms ofbook value and market value returns. A review ofthe integration strategy and appraisal of corporate objectives is required for this company to regain the confidence ofthe markets. AST Group Ltd needs to urgently arrest the decline in its share price or it will be exposed to a takeover bid soon / Thesis (MBA)-University of Natal, 2003.

In this investigation, I assessed the underlying reasons for the revolution that succeeded a conventional merger proposal, which then degenerated into a hostile takeover bid. To my astonishment, I discovered that both banks were not diametrically opposed to an amalgamation. In fact, they both agreed on the strategic importance and business wisdom thereof. The fundamental differences arose from Standard's perception of Nedcor's deep-rooted arrogant intents, which were to gain its assets at bargain basement prices. These views were extended to Nedcor's principal Old Mutual as well, who were accused of harbouring sinister beliefs to actualise the obsessions of Nedcor's CEO, who sought to preside over the largest bank in the country, if not in the sub-continent. In the final analysis, a significant fortune and precious time were wasted in waging and defending a fruitless effort. This culminated in enriching the consultants and professional advisors, at the expense of both Standard and Nedcor shareholders, and their legitimate stakeholders alike. Conversely, it has since been acknowledged that this case study was a classical illustration of the potential pitfalls of hostile mergers and acquisitions. These lessons will undoubtedly enlighten other institutions and industry sectors that may be secretly entertaining similar desires. / Thesis (MBA)-University of Natal, 2003.

The ability to grow market share in a saturated market is often difficult if that market is stable. In a country that has an economy that is not performing, growth of a company is often vital so as to allow the prosperity of a company. One such way to grow is for the company to form strategic alliances with other companies that are strong where the other company is week and in so doing stimulate a competitive advantage. In retail store outlets and location play an important role in competitive advantage by creating" new markets" , and if these new markets could increase the companies existing market share, then this results in a win - win situation for the company. Often moving into new markets involves risks as it is the unknown. By making a move to sell product in two pilot project Woolworths-Engen forecourt stores, Woolworths are moving into a market where they can sell a product group HMR's (home meal replacements) where currently they have no close competitors, thus capitalizing. This move is heralded However as this is a totally new format of selling, Woolworths need to ascertain if brand integrity will be affected and whether such a project is more than just a good idea. It was found the NPV's and IRR's ( the way Woolworths evaluate projects and project feasibility) from a Woolworths perspective were both extremely positive. From Engen's position, this initiative brought about a substantial increase in both petroleum and food store sales for the two pilot projects, comparable with those figures prior to the pilot projects launch. Woolworths as a company were very interested in the qualitative results conducted by an independent consultant, as they were concerned about maintaining brand integrity. This fear was not founded as the survey done by actual customers shopping the pilot project stores show that customer confidence over Woolworths brand integrity was not affected. Instead customers enjoyed the convenience. The strength of this Alliance is that both members have brought to the part aspects where the other member currently does not perform. Woolworths bring their good food and strong brand name linked with market dominance and Engen bring their immense outlet network, and prime locations. i.e. the strategic fit between these two corporates is extremely strong. All parties involved in this venture namely Woolworths, Engen Head Office and the petroleum station dealer benefit financially from this initiative. / Thesis (MBA)-University of Natal, Durban, 2003.

In this dissertation, I examine two related questions on whether and how tax aggressiveness of firms is associated with shareholder wealth in a new context – mergers and acquisitions (M&A). The first study investigates whether and how the tax aggressiveness of the acquirers and targets affects shareholder wealth. I present the idea of tax aggressiveness transfer whereby the acquirer’s propensity for tax planning applies to its target’s tax function after the change in ownership. I measure the degree of tax aggressiveness transfer using the relative tax aggressiveness of the acquirer and target (i.e., the difference in tax aggressiveness between the two firms). I find that acquisitions of more tax aggressive targets by less tax aggressive acquirers generate significantly lower acquisition gains. I also document weaker evidence that acquisitions of less tax aggressive targets by more tax aggressive acquirers generate higher acquisition gains. That is, the results suggest that the shareholder wealth effects of tax aggressiveness transfer are driven by the value-destroying effect of decreases in tax aggressiveness. Cross-sectional analyses reveal that the acquirer’s governance is a significant determinant of the shareholder wealth effects of tax aggressiveness transfer. Specifically, the results indicate that, when acquirers are well-governed, acquisitions of targets with lower tax aggressiveness by acquirers with higher tax aggressiveness are value-enhancing. Similarly, acquisitions of targets with higher tax aggressiveness by acquirers with lower tax aggressiveness are value-destroying. These findings are robust to various measures of tax aggressiveness. In sum, I find that tax aggressiveness transfer is a significant determinant of value creation or destruction in M&A. The second study is devoted to studying whether and how the target’s participation of tax shelters – an extreme form of tax aggressiveness – matters in acquirer’s valuation of the target firm. Using a novel dataset that identifies targets’ non-participation in tax shelters, I find that the target’s non-sheltering status is associated with a higher takeover premium, indicating that acquirers reward targets for not engaging in tax sheltering. This positive association is stronger for targets that are more opaque and for acquirers that are less tax aggressive. In addition, I find that the target’s non-sheltering status is positively associated with acquirer returns for acquirers that are weakly governed and for targets that are more opaque. Overall, my findings suggest that the target’s non-sheltering status is relevant in acquirers’ valuation of the target, and that the valuation benefits of the target’s non-participation in tax shelters are mainly accrued to the target’s own shareholders rather than to those of the acquiring firm.

This thesis investigates the monitoring effect from institutional ownership on bidder Chief Executive Officer (hereafter CEO) compensation in mergers and acquisitions (hereafter M&A) as well as the shift in compensation structure. While it is well-established in the literature that bidder CEO compensation soars significantly after conducting such transactions, the sources of the growth are left unclear. One major argument, the traditional theory, proposes that the growth derives from additional wealth created to shareholders in M&A, because according to the nature of compensation contract, CEOs’ interests are effectively aligned with shareholders’ benefits. On the other hand, scholars of managerial power theory argue that managerial power is stronger than shareholders’ oversight, so managers use M&A as a cover to expropriate wealth from shareholders. Whether the traditional theory or the managerial power theory dominates depends on the presence of optimal contract and the effectiveness of corporate governance. Institutional owners have more motivation and resources to restrict managerial behaviour than diffused owners. Thus, the change in CEO compensation following M&A and the driving factors behind the change could be different in firms with different types of ownership. After examining the 268 merger events from 266 US public non-family bidding firms from 2001 to 2005, this study finds that the magnitude of increase in CEO cash-based compensation is significantly alleviated in the presence of large institutional shareholders, and that the increase seems to be positively related to good short-term performance rather than managerial power. However, the concentrated institutional ownership does not seem to affect CEO equity-based compensation or the change in compensation structure. Besides, we do not find any significant relation between firm long-term post-acquisition performance and the market reaction to the announcement of M&A. Thus, we propose that without a reliable indication from short-term performance, large institutional shareholders could have problems in understanding the potential impact of M&A and they might adjust CEO equity-based compensation in a serial process after M&A.