Advertisement
| agency theory mergers and acquisitions: Principal-Agency-Theory in Mergers and Acquisitions Tobias Marsch, 2015-07-01 Seminar paper from the year 2015 in the subject Business economics - Controlling, grade: 2,0, , language: English, abstract: In times of globalization and increasing competition there are a lot of new big challenges for companies and their chief executive officers (CEO). High cost pressure, new competitors and the desire for a growing shareholder value are the challenges of global competitiveness. After exhausting all opportunities of internal optimization potentials the only way for many companies to grow or to ensure survival is to merge with other companies. The CEOs of the companies try to manage the growing requirements by extending the business portfolios or even acquiring whole companies. So in 2013 in Germany the number of Mergers & Acquisitions (M&A) was the highest for five years. A study of the Boston Consulting Group says that from 1988 to 2010 more than 26.000 transactions were realized. This figure confirms the high importance of that method. But are M&A the panpharmacon to handle the changing global markets and to ensure the prospective success of the companies? If you have a detailed look at the results you can recognize that a large number of executed M&A did not satisfy the expectations or even destroy value. The risks are all too frequent just underestimated. Often the failure is due to information asymmetry of the acting partners. This effect is called the principal-agency-problem. What is the reason for that and why do so many M&A fail? What are the real goals of the participants of such an M&A-process? Do all participants pursue the same objectives or are there maybe any other intentions in the case? The following assignment deals with the M&A-process in relation to the principal-agency-theory and shows some solution approaches to avoid bad surprises for all participating companies after an executed M&A-process. |
| agency theory mergers and acquisitions: The Mergers & Acquisitions Handbook Milton L. Rock, Robert H. Rock, Martin J. Sikora, 1994 A revised and updated compendium (1st ed., 1987) of state-of-the-art knowledge and practice, dealing with all major aspects of sound and value-creating mergers, acquisitions, and divestitures in the 1990s. Subjects span the entire MandA process including strategic planning, international dealmaking, sound valuation, optimum pricing, enhancement of shareholder value, tax implications, and the complex area of due diligence. Annotation copyright by Book News, Inc., Portland, OR |
| agency theory mergers and acquisitions: The Social Side of Mergers and Acquisitions Florian Frensch, 2007-12-03 Florian Frensch investigates which individual characteristics of employees and which dyadic factors of relationship partners affect the cooperation between employees of previously separated firms. The author develops an innovative approach for gathering network data with the help of a dynamic computer-based questionnaire which allows him to conduct a full network analysis of a group of approximately 400 employees on the lower operative level of the firms. |
agency theory mergers and acquisitions: A Research Agenda for Mergers and Acquisitions David R. King, Olimpia
Meglio, 2024-05-02 This Research Agenda poses unique questions and perspectives on how to generate impactful research on mergers and acquisitions. Bringing together a mix of established and emerging scholars, it outlines how future research in the field can enable managers to make better decisions and improve mergers and acquisition success. |
| agency theory mergers and acquisitions: A Theory of the Firm Michael C. Jensen, 2003-09-30 This collection examines the forces, both external and internal, that lead corporations to behave efficiently and to create wealth. Corporations vest control rights in shareholders, the author argues, because they are the constituency that bear business risk and therefore have the appropriate incentives to maximize corporate value. Assigning control to any other group would be tantamount to allowing that group to play poker with someone else's money, and would create inefficiencies. The implicit denial of this proposition is the fallacy of the so-called stakeholder theory of the corporation, which argues that corporations should be run in the interests of all stakeholders. This theory offers no account of how conflicts between different stakeholders are to be resolved, and gives managers no principle on which to base decisions, except to follow their own preferences. In practice, shareholders delegate their control rights to a board of directors, who hire, fire, and set the compensation of the chief officers of the firm. However, because agents have different incentives than the principals they represent, they can destroy corporate value unless closely monitored. This happened in the 1960s and led to hostile takeovers in the market for corporate control in the 1970s and 1980s. The author argues that the takeover movement generated increases in corporate efficiency that exceeded $1.5 trillion and helped to lay the foundation for the great economic boom of the 1990s. |
| agency theory mergers and acquisitions: Mergers & Acquisitions Michael A. Hitt, Jeffrey S. Harrison, R. Duane Ireland, 2001-03-22 In 1999, MCI WorldComm and Sprint agreed to merge. Valued at $129 billion, this expected transaction was the largest in history. However, it fell victim to regulators in Europe concerned with the potential monopoly power of the merged firm. This M&A action was merely the latest in a growing trend of blockbuster mergers over the past several years. Once a phenomenon seen primarily in the United States, mergers and acquisitions are increasingly being pursued across national boundaries. In short, acquisition strategies are among the most important corporate-level strategies in the new millennium. The need for clear, complete, and up-to-date guide to successful mergers and acquisitions had never been greater. This book more than fills that need. Looking at successful--and unsuccessful--mergers and acquisitions in a number of different industries, Mergers and Acquisitions: A Guide to Creating Value explains how to conduct an acquisition and how to avoid pitfalls that have doomed many such ventures. The authors take the reader step-by-step through the process, starting with the elements of a successful merger, due diligence to ensure that the target firm is sound and fits well with the acquiring firm, and how mergers and acquisitions are financed. They move on to explore how firms find partners/targets for acquisitions that have complementary resources and how to find partners with which integration and synergy can be achieved. Finally, they discuss the potential hazards found in M&A's and how to avoid them, how to conduct successful cross-border acquisitions, and how to ensure that ethical principles aren't breached during the process. Based on 15 years of research, this essential guide goes beyond specific case studies to cover all aspects of these ventures, making it required reading for all managers seeking to build a successful strategy. |
| agency theory mergers and acquisitions: Advances in Mergers and Acquisitions Sydney Finkelstein, Cary L. Cooper, 2010-12-20 Helps scholars think about mergers and acquisitions in new ways, building our knowledge base on this critical topic. This book focuses on all three characteristics that make up this research field - studies from scholars in different countries, with different research questions, and relying on different theoretical perspectives. |
| agency theory mergers and acquisitions: Encyclopedia of Finance Cheng-Few Lee, 2006-07-27 This is a major new reference work covering all aspects of finance. Coverage includes finance (financial management, security analysis, portfolio management, financial markets and instruments, insurance, real estate, options and futures, international finance) and statistical applications in finance (applications in portfolio analysis, option pricing models and financial research). The project is designed to attract both an academic and professional market. It also has an international approach to ensure its maximum appeal. The Editors' wish is that the readers will find the encyclopedia to be an invaluable resource. |
| agency theory mergers and acquisitions: Mergers, Acquisitions, and Other Restructuring Activities Donald DePamphilis, 2009-08-26 Explaining the real-world of mergers, acquisitions, and restructuring based on his own academic knowledge and experience, Donald DePamphilis shows how deals are done, rather than just explaining the theory behind them. |
| agency theory mergers and acquisitions: Mergers, Acquisitions, and Corporate Restructurings Patrick A. Gaughan, 2017-11-27 The essential M&A primer, updated with the latest research and statistics Mergers, Acquisitions, and Corporate Restructurings provides a comprehensive look at the field's growth and development, and places M&As in realistic context amidst changing trends, legislation, and global perspectives. All-inclusive coverage merges expert discussion with extensive graphs, research, and case studies to show how M&As can be used successfully, how each form works, and how they are governed by the laws of major countries. Strategies and motives are carefully analyzed alongside legalities each step of the way, and specific techniques are dissected to provide deep insight into real-world operations. This new seventh edition has been revised to improve clarity and approachability, and features the latest research and data to provide the most accurate assessment of the current M&A landscape. Ancillary materials include PowerPoint slides, a sample syllabus, and a test bank to facilitate training and streamline comprehension. As the global economy slows, merger and acquisition activity is expected to increase. This book provides an M&A primer for business executives and financial managers seeking a deeper understanding of how corporate restructuring can work for their companies. Understand the many forms of M&As, and the laws that govern them Learn the offensive and defensive techniques used during hostile acquisitions Delve into the strategies and motives that inspire M&As Access the latest data, research, and case studies on private equity, ethics, corporate governance, and more From large megadeals to various forms of downsizing, a full range of restructuring practices are currently being used to revitalize and supercharge companies around the world. Mergers, Acquisitions, and Corporate Restructurings is an essential resource for executives needing to quickly get up to date to plan their own company's next moves. |
| agency theory mergers and acquisitions: Why Companies Do Not Pursue Attractive Mergers and Acquisitions Richard B. Connell, 2008 There are substantial bodies of literature that advance theory about why merger and acquisition candidates are found to be unattractive, why negotiations are not concluded, and why the benefits of companies that are acquired are not realised. Little, if any, research identifies why merger and acquisition opportunities are not pursued in the period after candidates are analysed and found to be attractive but before negotiations begin. This study addresses this period by developing a theoretical framework of the variables that intervene to reverse decisions to pursue apparently attractive candidates before negotiations begin and which, in doing so, result in missed opportunities. The study is informed primarily by the strategic-management content literature but draws from the strategy-process literature including streams in strategic decision making (SDM) and behavioural decision theory (BDT). This is a critical book for business scholars that provides an important perspective that has not yet been studied. |
| agency theory mergers and acquisitions: An Insight into Mergers and Acquisitions Vinod Kumar, Priti Sharma, 2019-06-18 This book provides an insight in the phenomenon of Mergers and Acquisitions (M&A), including the various forms of corporate restructuring. It highlights the importance of M&A as a strategy for faster growth in the corporate. The book provides an enriched experience of the art of valuation with detailed description of M&A process, deal structuring and financing. The book also provides the broader perspective of Accounting and Regulatory aspects of M&A. While covering the conceptual underpinnings of M&A, the book supplements it with real life examples on each sub-topic with various numeric examples. Thus the judicious blend of theory and practical aspects, through numerical as well as real life case-studies, make the book a source of vast knowledge in the complicated and dynamic world of M&A. |
| agency theory mergers and acquisitions: Mergers And Acquisitions In Islamic And Conventional Banks: Opportunities And Challenges Nazim Ullah, Fauzias Mat Nor, Junaidah Abu Seman, Nur Ainna Binti Ramli, Fadly Nurullah Bin Rasedee, 2025-03-05 This book aims to provide details of mergers and acquisitions (M&A) in the banking sector, particularly with regards to Islamic and conventional banks. It analyses the different cases from theoretical and empirical perspectives, describing details of M&A strategy that work for corporate restructuring and elucidating how M&A strategy benefits different stakeholders. The book will also examine the relationship between M&A and bank performance and stability by studying the mediating role of market structures. It is a must read for practitioners, academics, businesspeople and policymakers who are interested in the intricacies of the banking sector, and those seeking a deeper understanding of how M&As operate. |
| agency theory mergers and acquisitions: Game Theory and Its Applications to Takeovers Suresh Deman, 2020-11-17 Game theory is an obscure area of the economic sciences. In 1995, the Nobel Prize was conferred upon John Nash, John Harsanyi and Reinhart Selton for their contribution of game theory to economics, which generated a great deal of interest in other disciplines, including the physical and material sciences. However, the beauty of game theory is its application to real world problems. This book commemorates the marriage of the theory and practice, not in heaven, but in the real world. |
| agency theory mergers and acquisitions: Mergers and Acquisitions: Perspectives Simon Peck, Paul Temple, 2002 This set includes articles from the four main fields which have influenced the study of Mergers and Acquisitions: Economics, Finance, Strategic Management and Human Resource Management. Featuring the key papers by individuals who shaped the field, the collection presents these formative pieces in thematically grouped sections, including coverage of: * Perspectives on the modern business corporation and the role of mergers and acquisitions: historical, financial, strategic and management * Causes of mergers and acquisitions activity * Performance impact of mergers and acquisitions activity * Public policy and the corporation The set features a comprehensive index and original introductory material. |
| agency theory mergers and acquisitions: Applied Mergers and Acquisitions Robert F. Bruner, 2016-02-08 A comprehensive guide to the world of mergers and acquisitions Why do so many M&A transactions fail? And what drives the success of those deals that are consummated? Robert Bruner explains that M&A can be understood as a response by managers to forces of turbulence in their environment. Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigor in the development of their M&A deals. By addressing the key factors of M&A success and failure, Applied Mergers and Acquisitions can help readers do this. Written by one of the foremost thinkers and educators in the field, this invaluable resource teaches readers the art and science of M&A valuation, deal negotiation, and bargaining, and provides a framework for considering tradeoffs in an effort to optimize the value of any M&A deal. |
| agency theory mergers and acquisitions: The Oxford Handbook of Corporate Governance Mike Wright, Donald S. Siegel, Kevin Keasey, Igor Filatotchev, 2013-03-28 Corporate governance remains a central area of concern to business and society, and this Handbook constitutes the definitive source of academic research on this topic, synthesizing international studies from economics, strategy, international business, organizational behavior, entrepreneurship, business ethics, accounting, finance, and law. |
| agency theory mergers and acquisitions: International Handbook on Industrial Policy P. Bianchi, 2008-01-01 This timely and much-needed Handbook reconsiders an old topic from a fresh perspective, raising a number of new, interesting and worthwhile issues in the wake of ten years of globalization. This comprehensive analysis illustrates that old-style industrial policies whereby the government directly intervened in markets, and was often the producer itself, are no longer relevant. Structural changes occurring in economies summarized in the term globalization are triggering the definition and implementation of new industrial policies. The contributors, leading experts in their field, unite to evaluate this shift of over a decade ago. Employing various empirical and methodological approaches with a strong theoretical underpinning, this world-wide study of the state-of-the-art of industrial policy issues is an invaluable reference tool. It has been enthusiastically received by a wide-ranging audience including scholars, researchers and policy makers with an interest in industrial economics and policy, business studies and policies for growth, competitiveness and development. |
| agency theory mergers and acquisitions: Handbook of the Economics of Finance G. Constantinides, M. Harris, Rene M. Stulz, 2003-11-04 Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton. |
| agency theory mergers and acquisitions: Mergers and Acquisitions in Practice Shlomo Y. Tarba, Sir Cary L. Cooper, Riikka M. Sarala, Mohammad F. Ahammad, 2016-12-08 The growth in mergers and acquisitions (M&A) activity around the world masks a high rate of failure. M&A can provide companies with many benefits, but in the optimism and excitement of the deal many of the challenges are often overlooked. This comprehensive collection, bringing together an international team of contributors, moves beyond the theory to focus on the practical elements of mergers and acquisitions. This hands-on, step-by-step volume provides strategies, frameworks, guidelines, and ample examples for managing and optimizing M&A performance, including: ways to analyze different types of synergy; understanding and analyzing cultural difference along corporate and national cultural dimensions, using measurement tools; using negotiation, due diligence, and planning to analyze the above factors; making use of this data during negotiation, screening, planning, agreement, and when deciding on post-merger integration approaches. Students, researchers, and managers will find this text a vital resource when it comes to understanding this key facet of the international business world. |
| agency theory mergers and acquisitions: Proceedings of the 7th International Conference on Economic Management and Green Development Xiaolong Li, Chunhui Yuan, John Kent, 2024-02-26 Economics has always been a heated research topic and green development is rising and integrating with various fields for interdisciplinary studies. Initiated in 2017, the International Conference on Economic Management and Green Development (ICEMGD) is an annual conference aiming at bringing together researchers from the fields of economics, business management, public administration, and green development for the sharing of research methods and theoretical breakthroughs. The 7th International Conference on Economic Management and Green Development (ICEMGD 2023) was held on August 6, 2023. It was a hybrid conference including several on-site workshops and an online session. The workshops were held in London, Galaţi, Birmingham, Sydney, and Beijing. The proceedings consist of papers accepted by ICEMGD 2023, which are carefully selected and reviewed by professional reviewers from corresponding research fields and the editing committee of the conference. The papers have a diverse range of topics situated at the intersecting fields of economic management, public administration, and green development. ICEMGD is working to provide a platform for international participants from fields like macro- and microeconomics, international economics, finance, agricultural economics, health economics, business management and marketing strategies, regional development studies, social governance, and sustainable development. This proceedings volume, together with the conference, looks forward to sparking inspiration and promoting collaborations. This book will be of interest to researchers, academics, professionals, and policymakers in the fields of economic management, public administration, and development studies. |
| agency theory mergers and acquisitions: Handbook of Corporate Finance Bjørn Espen Eckbo, 2007-05-21 Judging by the sheer number of papers reviewed in this Handbook, the empirical analysis of firms' financing and investment decisions—empirical corporate finance—has become a dominant field in financial economics. The growing interest in everything corporate is fueled by a healthy combination of fundamental theoretical developments and recent widespread access to large transactional data bases. A less scientific—but nevertheless important—source of inspiration is a growing awareness of the important social implications of corporate behavior and governance. This Handbook takes stock of the main empirical findings to date across an unprecedented spectrum of corporate finance issues, ranging from econometric methodology, to raising capital and capital structure choice, and to managerial incentives and corporate investment behavior. The surveys are written by leading empirical researchers that remain active in their respective areas of interest. With few exceptions, the writing style makes the chapters accessible to industry practitioners. For doctoral students and seasoned academics, the surveys offer dense roadmaps into the empirical research landscape and provide suggestions for future work.*The Handbooks in Finance series offers a broad group of outstanding volumes in various areas of finance*Each individual volume in the series should present an accurate self-contained survey of a sub-field of finance*The series is international in scope with contributions from field leaders the world over |
| agency theory mergers and acquisitions: Reframing Mergers and Acquisitions around Stakeholder Relationships Simon Segal, James Guthrie, John Dumay, 2022-07-07 Among the significant repercussions of the coronavirus pandemic is escalating public questioning of the desirability and sustainability of the market economy and the societal role of business. These concerns are linked to merger and acquisition (M&A) activity, with significant disruptive consequences for stakeholder relationships and their management. This book explores these changes, moving away from the traditional focus on the financial and strategic aspects of M&A and its rational, technocratic approach. Viewing M&A activity as economic, political, and social (EPS) processes, Segal provides a dialectic understanding of stakeholder relationships around M&A activity and challenges the view that M&A activity is static, linear, and predictable. He develops a conceptual framework to enable practitioners, researchers and policymakers to identify, understand and address the stakeholder and management implications of M&A activity. This is applied to four case studies that make explicit how complex stakeholder relationships play out around M&A and how these power dynamics were managed with different balances. Useful for academics, researchers, managers, advisors, investors, analysts, and other stakeholders, this book highlights the need to understand the EPS implications and processes involved around M&A. |
| agency theory mergers and acquisitions: Money from Mergers Nicholas Jewczyn, 2014-01-14 This book is dedicated to three groups of people - investors, advisors, and academics. Investors are always concerned with what to do concerning money. Financial Advisors are always concerned with how to do it concerning money. Professors and students are always concerned with why to do it concerning money. This text actively engages the members of all three of those groups and it provides industrial strength solutions from economic history, from three decades of mergers and acquisitions history, so that people will gain an insight into the what, how, and the why of how money was actually made, and by whom, concerning corporate mergers and acquisitions. If you are looking for a repository reference that ties all three of these aspects together in one place - this book is for you. |
| agency theory mergers and acquisitions: Advances in Mergers and Acquisitions Cary L. Cooper, Sydney Finkelstein, 2019-06-17 The chapters published in this volume provide cutting edge ideas by leading scholars, and help to inform mergers and acquisitions research around the world. |
| agency theory mergers and acquisitions: Does Corporate Performance Improve After Mergers? Paul M Healy, Sloan School of Management, Krishna G Palepu, 2023-07-18 This book examines the phenomenon of corporate mergers and the impact they have on performance. Drawing on extensive research and case studies, the authors explore the conditions under which mergers are most likely to succeed and offer guidance to managers looking to pursue a merger strategy. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant. |
| agency theory mergers and acquisitions: The Performance of Private Equity Funds Ludovic Phalippou, 2010 The performance of private equity funds as reported by industry associations and previous research is overstated. A large part of performance is driven by inflated accounting valuation of ongoing investments and we find a bias toward better performing funds in the data. We find an average net-of-fees fund performance of 3% per year below that of the Samp;P 500. Adjusting for risk brings the underperformance to 6% per year. We estimate fees to be 6% per year. We discuss several misleading aspects of performance reporting and some side benefits as a first step toward an explanation. |
| agency theory mergers and acquisitions: Corporate Governance and Regulatory Impact on Mergers and Acquisitions Greg N. Gregoriou, Luc Renneboog, 2007-07-26 Corporate Governance and regulatory presssures have been much in the news lately. How they affect the bottom line of corporations has been difficult to quantify, and research is just beginning to be published that addresses this crucial question. This book is the first collection for new research about the impact of takeover regulation and corporate governance on M&A financial results. It will be essential reading to any M&A specialist, an investment banker, a hedge fund manager, a private equity director, or a venture capitalist. Also a must read for financial analysts who follow M&A targets. The book presents research from around the world so it provides a global perspective on this important topic.*The first and only book of research on takeover regulation and corporate governance affecting M&A results*Stands out from all the How to books on M&A and M&A disaster books because it provides solid high-quality research on what works and how different decisions affect company and shareholder value*Research provides a guideline for decisionmakers in investment banks, private equity companies, and for financial analysts |
| agency theory mergers and acquisitions: The Routledge Companion to Mergers and Acquisitions Annette Risberg, David R. King, Olimpia Meglio, 2015-06-19 Mergers and acquisitions (M&As) are events that attract considerable interest from academics and practitioners, and much research has been conducted into their impact on individuals, organizations and societies. Yet, despite all the existing research and the varied theoretical and methodological approaches employed, there remains more to learn about M&As. The Routledge Companion to Mergers and Acquisitions takes a detailed look at this multifacted subject using a novel framework of four domains – substantive issues, contextual issues, methodological issues and conceptual issues. Drawing on the expertise of its international team of contributors, the volume surveys the state of the field, including emerging and cutting-edge areas such as social network analysis and corporate branding. This Companion will be a rich resource for students, researchers and practitioners involved in the study of M&As, and organizational and strategic studies more widely. |
| agency theory mergers and acquisitions: Corporate Governance, The Firm and Investor Capitalism Alexander Styhre, 2016-10-28 The shift from managerial capitalism to investor capitalism, dominated by the finance industry and finance capital accumulation, is jointly caused by a variety of institutional, legal, political, and ideological changes, beginning with the 1970s’ downturn of the global economy. This book traces how the incorporation of businesses within the realm of the state leads to both certain benefits, characteristic of competitive capitalism, and to the emergence of new corporate governance problems emerges. Contrasting economic, legal, and managerial views of corporate governance practices in contemporary capitalism, the author examines how corporate governance has been understood and advocated differently during the New Deal era, the post-World War II economic boom, and the after 1980 in the era of free market advocacy. |
| agency theory mergers and acquisitions: Mergers, Acquisitions, and Other Restructuring Activities Donald M. DePamphilis, 2003 This work includes updated cases and grounded models which reflect the theoretical underpinnings of the field. Expanded usage of key idea section headings enable the student to understand more easily the key point in each section of each chapter. |
| agency theory mergers and acquisitions: Mergers and Acquisitions and Executive Compensation Virginia Bodolica, Martin Spraggon, 2015-06-26 Over the past decades, the total value of executive compensation packages has been rising dramatically, contributing to a wider pay gap between the chief executive officer and the average worker. In the midst of the financial turmoil that brought about a massive wave of corporate failures, the lavish executive compensation package has come under an intense spotlight. Public pressure has mounted to revise the levels and the structure of executive pay in a way that will tie more closely the executive wealth to that of shareholders. Merger and acquisition (M&A) activities represent an opportune setting for gauging whether shareholder value creation or managerial opportunism guides executive compensation. M&As constitute major examples of high-profile events prompted by managers who typically conceive them as a means for achieving higher levels of pay, even though they are frequently associated with disappointing returns to acquiring shareholders. Mergers and Acquisitions and Executive Compensation reviews the existing empirical evidence and provides an integrative framework for the growing body of literature that is situated at the intersection of two highly debated topics: M&A activities and executive compensation. The proposed framework structures the literature along two dimensions, such as M&A phases and firm’s role in a M&A deal, allowing readers to identify three main streams of research and five different conceptualizations of causal relationships between M&A transactions and executive compensation. The book makes a comprehensive review of empirical studies conducted to date, aiming to shed more light on the current and emerging knowledge in this field of investigation, discuss the inconsistencies encountered within each stream of research, and suggest promising directions for further exploration. This book will appeal to researchers and students alike in the fields of organizational behavior and governance as well as accounting and accountability. |
| agency theory mergers and acquisitions: Understanding Mergers and Acquisitions in the 21st Century K. McCarthy, W. Dolfsma, 2012-12-05 The first volume to explore mergers and acquisitions in the 21st century. The authors systematically introduce, characterize and evaluate these mergers, and discuss the methodologies that can be employed to measure them. They also consider a number of factors relevant to the performance of mergers and acquisitions. |
| agency theory mergers and acquisitions: Knights, Raiders, and Targets John C. Coffee, 1988 |
| agency theory mergers and acquisitions: Strategic Corporate Communications in Mergers & Acquisitions Tobias Herdt, 2003-07-01 Inhaltsangabe:Summary: M&A transactions and corporate change are frequent occurrences in the globalized economies of today (c.f. section External growth and communication as global trends , page 1). On a global scale, led by the U.S., the European Union and Germany, M&A transactions have clearly become a global mega trend. Despite their growing popularity, M&A transactions often fail to produce the desired outcomes (c.f. section M&A Failure and Corporate Communications , page 5). This is partly due to poor M&A communication. The study at hand has several aims: To discuss the significance of M&A communication for the overall success of a transaction To establish the general determinants for the quality of M&A communication The key success factors To examine the individual determinants The factors determining the quantitative and qualitative deployment of M&A communication and its adjustment to the varying preconditions of different transactions Secondary as well as primary data led to the conclusion that M&A communication is of high significance to the success of an M&A transaction and can impact its results. Even if M&A communication can never be the single most important factor, determining merger success or failure, corporations acknowledging the significance of best-practice M&A communication have a higher M&A success probability and avoid opportunity costs. As described in more detail in section The significance of M&A communication for the overall success of a transaction , page 51, M&A communication derives its significance from the functions it fulfills. In the course of the interviews, those functions could be identified as reputation function, manipulation function, information function, acceptance function, action function, security function, and motivation function. In the context of post-merger integration communication, especially the possibility to decrease employees level of change resistance, uncertainty, frustration and demotivation is of particular value to transaction success. Even if communication per-se is a qualitative, not a quantitative factor, the study at hand concludes that there are ways to assess and evaluate communication success. If communication is ranked against what communication can possibly accomplish, communication success can be defined and measured (c.f. section The assessment of M&A communication success , page 57). As communication is significant to M&A transaction success and as [...] |
| agency theory mergers and acquisitions: Handbook on the Economics and Theory of the Firm Michael Dietrich, Jackie Krafft, 2012-01-01 This unique Handbook explores both the economics of the firm and the theory of the firm, two areas which are traditionally treated separately in the literature. On the one hand, the former refers to the structure, organization and boundaries of the firm, while the latter is devoted to the analysis of behaviours and strategies in particular market contexts. the novel concept underpinning this authoritative volume is that these two areas closely interact, and that a framework must be articulated in order to illustrate how linkages can be created. This interpretative framework is comprehensively developed in the editors' introduction, and the expert contributors – more than fifty academics of renowned authority – further elaborate on the linkages in the seven comprehensive sections that follow, encompassing: background; equilibrium and new institutional theories; the multinational firm; dynamic approaches to the firm; modern issues; firms' strategies; and economic policy and the firm. Bridging economics and theory of the firm, and providing both technical and institutional perspectives on real corporations, this path-breaking Handbook will prove an invaluable resource for academics, researchers and students in the fields of economics, heterodox economics, business and management, and industrial organization. |
| agency theory mergers and acquisitions: Mergers, Acquisitions, and Other Restructuring Activities, 4E Donald DePamphilis, 2007-11-26 Dr. Donald DePamphilis explains the real-world of mergers, acquisitions, and restructuring based on his academic knowledge and personal experiences with over 30 such deals himself. The 99 case studies span every industry and countries and regions worldwide show how deals are done rather than just the theory behind them, including cross-border transactions. The interactive CD is unique in enabling the user to download and customize content. It includes an Excel-based LBO model and an M&A Structuring and Valuation Model in which readers can insert their own data and modify the model to structure and value their own deals. CD also real options applications and projecting growth rates. Student Study Guide on CD contains practice problems/solutions, powerpoint slides outlining main points of each chapter, and selected case study solutions. An extensive on-line instructor's manual contains powerpoint slides for lectures following each chapter, detailed syllabi for using the book for both undergraduate and graduate-level courses, and an exhaustive test bank with over 750 questions and answers (including true/false, multiple choice, essay questions, and computational problems). * CDROM contains extensive student study guide and detailed listings of online sources of industry and financial data and models on CDROM * Numerous valuation and other models on CDROM can be downloaded and customized by readers * Online Instructor's Manual with test bank, extra cases, and other resources * Over 90 cases |
| agency theory mergers and acquisitions: Anchoring in Mergers & Acquisitions Jan Gropp, 2012-11-20 Master's Thesis from the year 2012 in the subject Business economics - Investment and Finance, grade: 1.0, Copenhagen Business School, course: Corporate Finance, language: English, abstract: Several studies show that people are often influenced by reference points which are derived from the context at hand in estimations or decisions under uncertainty. This analysis deals with the importance of reference points in the UK and to a lesser extent the European takeover market. Applying prospect theory to equity investment we would predict that shareholders value gains and losses relative to a reference point in a very human fashion. In a psychological bias called the anchoring effect, investors adopt irrelevant salient anchor values as reference points and are biased towards these. We follow these predictions and, in this thesis, test historic peak prices as anchor values in corporate takeovers for bidder and target management as well as shareholders. Firstly, we analyze whether bid prices are affected by the 13-, 26-, 39-, 52- and 65-week high prices. Secondly, we are interested in whether for companies whose valuation has fallen far from the historic peaks, these anchor values are of lesser relevance, consistent with the S-shaped form of the prospect theory value function. Finally, bidding above the historic peak prices is tested and analyzed, in whether this entails a higher probability of bidding success. For the purpose of the thesis, a dataset of in total 1602 takeover bids for listed companies in the United Kingdom (1559), Germany (36) and Poland (7) from Thomson ONE Banker was constructed. The sample includes bids announced and completed in the time period of 1985 - 2011. Data on stock price history for the target companies was extracted from Thomson Reuters Datastream. OLS regression, Gaussian Kernel Regression, Piecewise Linear Regression and Probit regressions are the tools employed to thoroughly analyze the data. We find that all historic reference values examined exhibit statistically significant impact on the bidder offer prices with diminishing impact of the reference prices observed for extreme values. Importantly, no statistically significant evidence that bidding above historic peak prices secures a higher acceptance rate from target shareholders was discovered. This finding does not support the reference point thinking for target shareholders. The same is true for offer price increases. Offer prices below peak prices do not carry a higher probability of being amended than offer prices ranging above reference prices. |
| agency theory mergers and acquisitions: Value Creation in Mergers, Acquisitions, and Alliances Kathrin Bösecke, 2009-09-30 Kathrin Bösecke analyses the factors that determine the success of business combinations. Based on her analysis of 126 acquisitions and 66 alliances in the European utility industry, she identifies the origin of the participating firms as well as the target country as essential determinants of value creation. |
| agency theory mergers and acquisitions: Mergers and Acquisitions An Empirical Study of Selected Indian Companies Dr Leesa Mohanty, |
Topics In Finance Part VIII—Mergers & Acquisitions
F inance textbooks typically excel at the mechanics but tend to skimp on the critical concepts that undergird financial management. Among these are stockholder wealth maximization, risk and …
A Thorough Examination of Agency Theory and Agency Costs …
Agency theory, a scholarly framework, probes into principal-agent relationships in the business sphere, striving to resolve the quandaries inherent within agency affiliations.
Brokering Mergers: An Agency Theory Perspective on the Role …
Agency theory suggests a conflict of interest in the relationship between investment bankers and the firms they represent during merger nego-tiations. We examined this proposition by …
Ownership, institutions, and the agency of M&A completion
context of acquisitions, we first propose that the completion of (or the withdrawal from) announced acquisitions depends on the relative power of risk-averse debtholders in a way that completion …
Mergers and Acquisitions: A Global View - Springer
Agency theories suggest that mergers and acquisitions may solve agency problems by acting as a mechanism to remove ineffective managers or, alternatively, that mergers and acquisitions …
A Reference Point Theory of Mergers and Acquisitions
In particular, we propose a “reference point” view of mergers which holds that salient but largely irrelevant reference point stock prices of the target help to explain several aspects of mergers …
MERGERS AND ACQUISITIONS: A SYNTHESIS OF THEORIES …
In this article, we are going to focus on the general concepts of mergers and the determinants of success or failures of these operations. Besides the motivations and the factors, we are going …
Principal Agency Theory In Mergers And Acquisitions Tobias …
the case The following assignment deals with the M A process in relation to the principal agency theory and shows some solution approaches to avoid bad surprises for all participating …
RUN-UP, TOEHOLDS, AND AGENCY EFFECTS IN MERGERS …
This paper analyses some particular characteristics of merger and acquisition (M&A) transactions in an emerging market (Portugal) using a sample of 52 M&A targets between 1989 and 2001.
AGENCY FIRM THEORY FINANCING DECISIONS AND …
In a lucid treatment of agency theory, which considers the relationship between two parties, ‘the principal’ and ‘the agent’, Colm Ryan comprehensively addresses the is- sues, specifically the …
Who makes acquisitions? CEO overconfidence and the …
We analyze the impact of overconfidence on mergers in a general setting that allows for market inefficiencies, such as information asymmetries, and managerial frictions, such as agency …
Research on Merger and Acquisition Motivation and Methods
Mergers and acquisitions may involve multiple parties, usually stronger enterprises acquiring weaker ones. The specific motivations of mergers and acquisitions include four aspects: based …
T EVIDENCE ON Theory and evidence on mergers and …
Abstract: The theory of mergers and acquisitions (M&As) has been developed almost exclusively from the study of large deals by large firms. In this paper we argue that the behaviour and …
Corporate Finance: Mergers and Acquisitions: A Comparative …
By applying Agency Theory to M&A activities, researchers and practitioners gain insights into the motivations and behaviors of corporate actors. This understanding aids in aligning shareholder …
Theory and Evidence of Horizontal Mergers - Finance …
On the empirical front, this paper proposes a measure of clusteredness, i.e., the concentration of contemporaneous same-industry M&A activities.
Agency theory and ownership - CORE
Agency theory holds a central role in the corporate governance literature. It describes the fundamental conflict between self-interested managers and owners, when the former have the …
Private Equity's Three Lessons for Agency Theory - Brooklyn …
Part I addresses agency theory’s three-way association among control transfers, governance discipline, and hostile takeovers, suggesting that this triptych needs to be unbundled and …
Mergers and acquisitions and the CEO: Tenure and outcomes
Research on top management teams (TMTs) has found that a good work relationship between senior managers enhances team cohesiveness, communication, and firm performance. This …
Decisionmaking for mergers and acquisitions: the role of …
Th us, there are two main theories — rational responses to agency costs and non-rational response to managerial hubris — that have been detrimental to explain why managers make …
Topics In Finance Part VIII—Mergers & Acquisitions
F inance textbooks typically excel at the mechanics but tend to skimp on the critical concepts that undergird financial management. Among these are stockholder wealth maximization, risk and …
A Thorough Examination of Agency Theory and Agency …
Agency theory, a scholarly framework, probes into principal-agent relationships in the business sphere, striving to resolve the quandaries inherent within agency affiliations.
Brokering Mergers: An Agency Theory Perspective on the …
Agency theory suggests a conflict of interest in the relationship between investment bankers and the firms they represent during merger nego-tiations. We examined this proposition by …
Ownership, institutions, and the agency of M&A completion
context of acquisitions, we first propose that the completion of (or the withdrawal from) announced acquisitions depends on the relative power of risk-averse debtholders in a way that completion …
Mergers and Acquisitions: A Global View - Springer
Agency theories suggest that mergers and acquisitions may solve agency problems by acting as a mechanism to remove ineffective managers or, alternatively, that mergers and acquisitions …
A Reference Point Theory of Mergers and Acquisitions
In particular, we propose a “reference point” view of mergers which holds that salient but largely irrelevant reference point stock prices of the target help to explain several aspects of mergers …
MERGERS AND ACQUISITIONS: A SYNTHESIS OF …
In this article, we are going to focus on the general concepts of mergers and the determinants of success or failures of these operations. Besides the motivations and the factors, we are going …
Principal Agency Theory In Mergers And Acquisitions …
the case The following assignment deals with the M A process in relation to the principal agency theory and shows some solution approaches to avoid bad surprises for all participating …
RUN-UP, TOEHOLDS, AND AGENCY EFFECTS IN MERGERS …
This paper analyses some particular characteristics of merger and acquisition (M&A) transactions in an emerging market (Portugal) using a sample of 52 M&A targets between 1989 and 2001.
AGENCY FIRM THEORY FINANCING DECISIONS AND …
In a lucid treatment of agency theory, which considers the relationship between two parties, ‘the principal’ and ‘the agent’, Colm Ryan comprehensively addresses the is- sues, specifically the …
Who makes acquisitions? CEO overconfidence and the …
We analyze the impact of overconfidence on mergers in a general setting that allows for market inefficiencies, such as information asymmetries, and managerial frictions, such as agency …
Research on Merger and Acquisition Motivation and Methods
Mergers and acquisitions may involve multiple parties, usually stronger enterprises acquiring weaker ones. The specific motivations of mergers and acquisitions include four aspects: based …
CEO Temporal Focus and Behavioral Agency Theory: …
Drawing on the concept of temporal focus, we theorize that present-focused CEOs adhere to the BAM’s endowment effect, while exhibiting even stronger relationships between current and …
T EVIDENCE ON Theory and evidence on mergers and …
Abstract: The theory of mergers and acquisitions (M&As) has been developed almost exclusively from the study of large deals by large firms. In this paper we argue that the behaviour and …
Corporate Finance: Mergers and Acquisitions: A …
By applying Agency Theory to M&A activities, researchers and practitioners gain insights into the motivations and behaviors of corporate actors. This understanding aids in aligning shareholder …
Theory and Evidence of Horizontal Mergers - Finance …
On the empirical front, this paper proposes a measure of clusteredness, i.e., the concentration of contemporaneous same-industry M&A activities.
Agency theory and ownership - CORE
Agency theory holds a central role in the corporate governance literature. It describes the fundamental conflict between self-interested managers and owners, when the former have the …
Private Equity's Three Lessons for Agency Theory - Brooklyn …
Part I addresses agency theory’s three-way association among control transfers, governance discipline, and hostile takeovers, suggesting that this triptych needs to be unbundled and …
Mergers and acquisitions and the CEO: Tenure and outcomes
Research on top management teams (TMTs) has found that a good work relationship between senior managers enhances team cohesiveness, communication, and firm performance. This …
