An example of metamorphosis is the creation of ssl international. The main motives behind takeovers and mergers business. All companies except one lose their identity in a merger through absorption. Meaning of amalgamation, merger, acquisitions and takeover 1. Mcguire s psychological motives marketing 110 with geringer at california state university fresno studyblue flashcards. The agency view assumes that instead of maximizing shareholders wealth, managers maximize their. Motives for mergers and merger theory how value is added. The most general motive is simply that the purchasing firm considers the acquisition to be a profitable investment. Implications for cognition, emotion, and motivation. Mergers and acquisitions happen for a number of reasons that vary in significance across different regions, industries, and sectors, as well as over time. Implies that firms in similar industries would be potential acquirers. Apr 11, 2016 this paper is an attempt to discuss major studies undertaken to identify the motives behind mergers and acquisitions.
According to social exchange theory, by considering the perceived benefits for all parties acquirer, merger partners or employees of two business entities which enter into a relationship, it is essential to understand the nature of pc that shapes the attitudes and behaviors at work cording et al. Since the motives for related mergers manifest themselves directly in a product market effect and indirectly in a stock market effect, we first examine the postmerger changes in measures of real performance, namely the product selling price measured by the producer price index ppi and the market shares of merging firms. As per the dictates of their parent companies, their two indian counter parts, visa. Social psychologists would say that she has high selfcomplexity.
According to guaghan 2007, mergers and acquisitions fall into three categories. Company funds are properly utilized by establishing various strategies with scale of economy to keep in each and every company transportation takes place on regular basis by acquisition of corporate company we can reduce fright charges by purchasing a supply chain. Often, mergers that start out hostile end up as friendly, when offer price is raised. Pittman and others published social motivation find, read and cite all the research you need. Motives for mergers and acquisitions mba knowledge base. An adjunct of this study is the development of a comprehensive, computational model of postmerger integration dynamics. A number of motivations for merger and acquisition are proposed in the literature, mostly drawn directly from finance theory but with some inconsistencies. In this section, we consider a number of different motives for acquisitions and suggest that a coherent acquisition strategy has to be based on one or another of these motives. An example of this type of merger is the absorption of tata fertilisers ltd.
Types, regulation, and patterns of practice john c. Profitability analysis of mergers and acquisitions. Investment banking what is the motivation behind mergers. Nov 14, 2012 along with globalization, merger and acquisition has become not only a method of external corporate growth, but also a strategic choice of the firm enabling further strengthening of core competence. This learning of new information to solve problems. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The role of intolerance of uncertainty and worry motives on seeking information in gad versus nonanxious college students. A merger or acquisition can be used by a company as defensive maneuver to resist takeover by another company. A merger is a corporate strategy of combining different companies into a single company in order to. Motives for mergers and acquisitions in the banking sector of. Mergers and acquisitions motives jrisy motis 1 toulouse school of economics ehess gremaq and university of crete jrissy. The motives for takeoversand mergers and how theselink with corporate strategy 2.
There have been three merger waves in the 1960s with the multinational takeovers, in the. Motives for acquisitions not all firms that make acquisitions have acquisition strategies, and not all firms that have acquisition strategies stick with them. Tcl, an acquiring company a buyer, survived after merger while tfl, an acquired company a seller, ceased to exist. Motives of mergers synergy, growth, power, diversification. Egoism, empathy, and selfother merging joshua may southern journal of philosophy vol. Motives for mergers and acquisitions in the banking sector. Using a sample of 3,520 domestic acquisitions in the united states, we find. Reasons and motives for amalgamation, merger and acquisitions jaykumar ashokbhai sathavara. Mergers and acquisitions transactions strategies in.
Some internal psychological factors influencing consumer choice william j. Mergers and acquisitions ma and corporate restructuring are a big part of the. The megamergers in the last decades have also brought about structural changes in some industries, and attracted international attention. Hitt a, david king b, hema krishnan c, marianna makri d, mario schijven e, katsuhiko shimizu f, hong zhu g 1. Aug 12, 2010 in this section, we consider a number of different motives for mergers and acquisitions. This article provides an indepth study on the concept of mergers and takeovers of companies. Interestingly, distressed firms are found to be predators and the market reaction to these is not always predictable. Synergy implies a situation where the combined firm is more valuable than the sum of the individual combining firms. Aug 12, 2010 merger can be used as shields for protection from raiders. It is generally achieved through stock swap or outright payment to other company. According to burner 2002, there are four approaches i. Merger simulation provides a precise, quantitative prediction of the unilateral effects of the merger.
It is astounding that the merger and acquisition activity in the 1990s seems to be even more dramatic and widespread, with number of deals comparable to the 1960s, and values similar to the 1980s. Some internal psychological factors influencing consumer choice, journal of consumer research, volume 2. Department of psychology, franklin and marshall college, lancaster, pennsylvania. The postmerger values of the relevant variables are the end point of what can be imagined as a sequence of actions and reactions by the competing firms as they adjust to the merger. The system helps marketers to isolate motives likely to be involved in various consumption situations. Broadly, the studies find and the theory puts forth that there is a higher consequence arising from preexisting structural characteristics, over those that are cultural. For example, maksimovic and phillips 2001 find that about 4%. The pre merger planning is the phase where the whole merger strategy is being planned and formulated at the most comprehensive and practical manner. The premerger planning is the phase where the whole merger strategy is being planned and formulated at the most comprehensive and practical manner. Managerial motives when a takeover or merger fails, you can often trace it back to what are called managerial motives. Needless to say, the most prominent reason is synergies, i. Motives for mergers and acquisitions in the banking sector focarelli et al.
Overcoming pitfalls, building synergy, and creating value michael a. Overcoming pitfalls, building synergy, and creating value author. I propose a categorization of such motives based on the residual. Generally, the motives of mergers are to enhance the competitiveness of new combined entity in the form of synergies, growth etc. In order to explain the reasons why companies are keen on mergers and acquisitions, many motives have been proposed by financial economists. In this section, we consider a number of different motives for mergers and acquisitions. Mcguire, is reprinted from the uses of mass communications. Study 19 mcguire s psychological motives flashcards from haley b. Mergers and acquisitions were perhaps not that relevant in the older closed economies, but in todays world their importance cannot be undermined.
Synonymous, the terms merger and acquisition mean slightly different things. Pdf on may, 2018, dolores albarracin and others published the. This research work has the following individual objectives. Department of accounting, chaoyang university of technology. Evidence finds that the importance of various motivations for mergers and acquisitions changes over time.
Table 1 from psychological motives and communication gratification, by william j. Mcguire first divided the motivation into two main categories using two criteria. Management of a more efficient acquiring firm can bring up the level of efficiency of the acquired firm, providing both social and private gain. This resulted from the merger between seton maker of tubular bandages and pharmaceuticals and scholl maker of orthopedic footwear in 1998, followed by the merger of that company in 1999 with london international maker of durex condoms and disposable products used in hospitals. Coates iv1 the core goal of corporate law and governance is to improve outcomes for participants in businesses organized as corporations, and for society, relative to what could be achieved. Under the mcguires psychological motives the factors that. Mergers motives consolidation business mergers and. Mcguires psychological motivations is a classification system that organizes theories of motives into 16 categories. Evaluating financial implications of potential acquisition 5. Under the mcguires psychological motives, the factors that drive consumers to purchase hybrid cars can be due to cognitive growth motives and affective preservation motives. Poster presented at 96th annual western psychological association convention, long beach, ca. Motives and contexts of identity change stanford graduate school. An empirical examination of efficiency theory of mergers in. Profitability analysis of mergers and acquisitions mergers and acquisitions around the globe represent a huge reallocation of resources, within and across countries and therefore, it has been the interest of empirical studies for many years.
Mergers motives free download as powerpoint presentation. A merger is a combination of two or more companies into one company. To explore the strategic motives behind the mergers and acquisitions. Dec 23, 2012 motives behind merger and acquisition. The merger implementation is the process where merger negotiation proceeds until the deal is concluded. After studying the various motives of mergers and acquisitions, now i further study the effect of the motives on mergers and acquisitions, i. Some internal psychological factors influencing consumer. The globalization results in strong necessity to originate and implement thea new corporate strategies towards the businesses restructurizations through the various types of the mergers and acquisitions in order totransactions optimize the organizational structures, management capabilities, financial indicators, aiming to establish the fully optimized profitable. Pdf the psychology of attitudes, motivation, and persuasion.
For testing the efficiency theory of mergers, various researchers hav e carried out event studies to analyze if there is a change in the efficiency of the firm after a merger in terms of creation of shareholders wealth. When a takeover or merger fails, you can often trace it back to what are called managerial motives. The psychology of attitudes, motivation, and persuasion. Since the motives for related mergers manifest themselves directly in a product market effect and indirectly in a stock market effect, we first examine the post merger changes in measures of real performance, namely the product selling price measured by the producer price index ppi and the market shares of merging firms. The merger is supported by the managements of both firms. Merger, acquisitions, takeover, motives and reasons 1.
Impact of worry motives on negative emotion and somatic symptoms. This paper is an attempt to discuss major studies undertaken to identify the motives behind mergers and acquisitions. Results also support the common expectation that organizational complexity is a. Aug 05, 2017 recently icici limited a parent company has merger with its subsidiary icici bank signifying the downstream merger. Firstly, as hybrid cars are different, consumers who switch to hybrid cars will need to find out and learn new information about how hybrid cars works. Our pdf merger allows you to quickly combine multiple pdf files into one single pdf document, in just a few clicks. Coates iv1 the core goal of corporate law and governance is to improve outcomes for participants in businesses organized as corporations, and for. Psychological factors influencing consumer behaviour instructor janne peltoniemi pages 46 supervisor. Reasons and motives for amalgamation, merger and acquisitions. Companies undertake merger and acquisition to achieve certain strategic and financial objectives.
Banks merge in order to get higher income by selling more services to a greater set of customers whereas acquisitions are made for the purpose. Product similarity and the motives for related mergers. Merger and acquisition motives there are a number of motives that might play a role in merger activity. The effect of mergers and acquisitions on market power and. Motives for mergers and acquisitions page 3 of 3 mba. In general these are bad news for the shareholders of a business that is pursuing the takeover. Mcguires psychological motives mcguire developed a. Acquirer must go directly to the target firms stockholders, try to get 51% to tender their shares. If a firm feels that it could be acquired by another firm, it may consider getting involved in a merger game.
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