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Strategy - Mergers & Acquisitions


Avoiding Lemons in
M&A Deals
Three methods for obtaining vital information before the deal happens. If history provides any guide, many M&A deals will fail to generate any real value for the shareholders of the acquiring company, and a good number will ultimately become wealth-destroying propositions. New insights into why this happens have come from seemingly unrelated markets, including those for used cars, labor and insurance. Strategic management researchers and financial economists have used these insights to understand why some M&As perform poorly and to identify ways that managers can cope with the challenges presented by knowledge discrepancies across bidders and targets. The fundamental problem lies in two inherent features of many M&As: the acquiring companyís struggle to value the targetís resources and the need for the parties involved to agree on a price. pdf 2005






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Status: 17. Oktober 2012