Merger and Acquisition Strategies

Merger and Acquisition Strategies

How to Create Value

New Perspectives on the Modern Corporation series

Angelo Dringoli

The decision to carry out a merger or acquisition is certainly a risky one, not least because of the number of variables influencing the final outcome. It is also a decision frequently based on the wrong objectives and an incorrect evaluation process. With this in mind, this important new book offers solutions for reducing the high percentage of mergers and acquisitions (M & As) that fail. It adopts a normative approach, using theoretical analysis to show what managers could and should do to increase shareholders’ value through successful M & A strategies. It also explores the conditions that are suitable for favouring a certain type of M & A (horizontal, vertical or diversified) over the others. In conclusion, the book presents case studies of successful M & A strategies providing a link between theory and practice.

Chapter 2: Data and empirical evidence on M & A performance

Angelo Dringoli

Subjects: business and management, strategic management, economics and finance, industrial organisation


In this chapter data on M & As is presented, with a particular focus on the period 2005_ 2012. Data points out that M & A is a very widespread strategy through which firms grow. What about the real outcomes of M & As around the world? To answer this question we have analysed some significant empirical studies made in the last years. The results show that a large percentage of M & As reduce the value of the acquiring firm or do not produce significant increase in value. In other words, a large part of M & As do not produce the estimated synergies and the results expected by the shareholders of the acquiring firm. All this stimulates the need to find solutions for reducing the percentage of M & A failures.

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