Creation of Synergies Through Mergers and Acquisitions

Kedia, Vasudha (2007) Creation of Synergies Through Mergers and Acquisitions. [Dissertation (University of Nottingham only)] (Unpublished)

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Although Mergers and Acquisitions have seemingly high risks attached, they have been around for almost a century, and are an important tool in the strategic growth of a firm. There has been ample Empirical evidence on the creation and destruction of value through the M&A activity, which have showed diverse results. Drawing upon this framework the primary focus of this research is to study whether value was created or destroyed for the target and/or bidding firms and shareholders involved in an M&A activity.

A case study of two diverse companies, namely that of Exxon and Mobil and AOL and Time Warner, supplemented by a literature review has been undertaken in order to see whether both these entities have benefited from the merger activity or not. It also comments on the performance and profitability of M&A activities using the Accounting Study Approach, which analyses the financial performance of the companies involved in an M&A activity, and the Event Study Approach, which measures the returns to the shareholders of the target and bidding firms. The research also outlines various factors which account for value-creation and value-destruction in a merger activity.

From the results obtained from these studies, this discussion strongly suggests that it is the target firm and their shareholders, who benefit from the M&A activity. Thus from a shareholders point of view, it is better to be a seller than a buyer.

Item Type: Dissertation (University of Nottingham only)
Keywords: Mergers and Acquisitions
Depositing User: EP, Services
Date Deposited: 25 Apr 2008
Last Modified: 21 Dec 2017 02:22

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