Category: Acquisition

Introduction

First of all it is necessary to mention that for the period of economic prosperity and fierce global expansion, Saab could be regarded among the most successful Geely’s strategic investments in foreign automakers. Geely’s acquisition of Saab could not be hostile; it could be regarded as a friendly purchase, supposed to improve the car manufacturing of both contractors. The purchase could have been a horizontal acquisition. When American automobile manufacturers expanded globally, there were too many companies for the market to support. This acquisition was aimed for creating fewer companies that are seemingly more competitive.

Resource Based View of the firm rationale

Before analyzing the resource based view, it is necessary to mention that Conrad (2004) in his financial research gives the following notion: “Economic theory holds that in the normal course, and in the absence of market imperfections, abnormal economic rents will get competed away by rivals or new entrants to an industry. The Resource Based View holds that firms can earn sustainable supra-normal returns if and only if they have superior resources and those resources are protected by some form of isolating mechanism preventing their diffusion throughout industry”. From this point of view it should be stated that the financial resources of Geely and Saab should be regarded as the general merging of the companies and financial activities.

It is necessary to mention that Geely is not some huge car manufacturer. The 2008 sales entailed 4,821,692,505 Hong Kong Dollars ($ 622 051 371). The enterprise value of Saab is evaluated as $1 353 227 000. Originally, the acquisition of Saab by Geely could be rather advantageous as the company has essential financial activities. Geely would have also acquired additional space for marketing activity as well as the positioned brand.

Value Chain Rationale

The analysis of the activities that any company incorporates for the maters of competitive advantage should be started from the general analysis of competitiveness of the corporation. The fact is that, on HK 4 821million reported in 2008, the cost of the additional services totaled 5.7% of sales (i.e., the gross profit was 94.3% of sales). The gross profit reserve appears to be essentially better than it was in 2007, when cost of services sold totaled 22.8% of sales. Originally, there was a wide variation in the gross profit margins at the three comparable companies, from 21.0% of sales to 95.1% of sales.

Originally, the industry which the company is involved in is the car manufacturing. The fact is that, the main advantages of the company is the manufacturing of comparatively cheap automobiles for Eastern Europe and Asia.

The activities, which are involved in successful performance of thee company are the following:

• Inbound Logistics. Includes receiving, storing, inventory control, transportation planning.
• Operations. Includes machining, packaging, assembly, equipment maintenance, testing and all other value-creating activities that transform the inputs into the final product.
• Outbound Logistics. The activities required to get the finished product at the customers: warehousing, order fulfillment, transportation, distribution management.
• Marketing and Sales. The activities associated with getting buyers to purchase the product, including: channel selection, advertising, promotion, selling, pricing, retail management, etc.
• Service. The activities that maintain and enhance the product’s value, including: customer support, repair services, installation, training, spare parts management, upgrading, etc. (Song, 2008)

Financial rationale

Risk analysis for the financial profitability should take into account all the financial numbers of the marketing strategy and results of the company. Initially, it should be stated that the company operates on the stable market with comparatively low competition, nevertheless, the competitors are ready to conquer for the Chinese market, and the East European market have been already flooded with different car brands (European, Asian and American).

PEST Analysis

Political

There are no political obstacles for the development, as well as merging of the companies and the car manufacturing industry in general. It should be stated that political situation promotes the economic development of the country, consequently, the actions, aimed at improving the well being of China and Chinese industry are encouraged.

Economic

Economic situation of the car manufacturing industry is rather favorable for the further development. The fact is that, it is regarded as one of the most profitable sphere, and, in spite of the fact this sphere is highly competitive, there are still markets which are not flooded with cars, so, there is room for development.

Social

It should be stated that social sphere in this case is the least important, as China does not suffer the lack of working places on the one hand, and the merging will not cause the changes in this situation on the other hand. Consequently, there is no need to make deep researches and analyses of this factor, nevertheless, there is strong necessity to study the social factor of the target markets.

Technological

Technological factor is the most favorable in the whole sphere. It is stated that the technologies are developing rapidly, consequently, the development of the company from the technological side is beyond any doubt.

References

Conrad, J. M. (2004). Resource Economics. Cambridge, England: Cambridge University Press.

Foss, N. J. (Ed.). (2007). Resources, Firms, and Strategies: A Reader in the Resource-Based Perspective. Oxford: Oxford University Press.

Geely Cars Enter Local Market. (2007). Manila Bulletin, p. NA.

Garten, J.E. (2002). The CEO’s new agenda. Sloan Management Review, 44(1).

Gulati, R., Freeman, K.W., Nolen, G., Tyson, J., Lewis, K.D., & Greifeld, R. (2004). How CEOs manage growth agendas. Harvard Business Review, 82(7).

Funk, K. (2003). Sustainability and performance. Sloan Management Review, 44.

D’Souza, D. (2002). Technological capitalism and its discontents. Web.

Song, T. S. (2008). Resources for China-ASEAN Relations. China: An International Journal, 6(1), 171.

Introduction

Merck & Company is a leading manufacturer of pharmaceutical drugs. Its products are very popular in the pharmaceutical industry. The company has announced that it is planning to purchase Medco containment Services. The cost of acquisition is estimated at $ 6.6 billion. Medco is a major prescription management corporation and vendor of mail-order medications in America. Being the CEO of Merck, I am required to come up with a recommendation about the acquisition of Medco containment Services. I will present my recommendations to the board of directors of my company. To come up with my recommendation, I have analyzed the commendations of three other associates and my own inquiry. After a thorough analysis of all the stakeholders’ recommendations, I recommend that Merck should initiate the acquisition of Medco Containment Services. Indicated below is how I arrived at my recommendation.

Associates recommendation

As such, the company’s chief operating officer’s main concern is the interaction and incorporation issues that will arise because of the acquisition of Medco. Merck is a research-oriented pharmaceutical company, whereas Medco is a prescription promotion corporation. In this regard, the chief operations officer believes that the structural values and operations of the two firms will be in conflict with one another. The vice-president of sales & marketing supports the idea of purchase. He postulates that through the acquisition, Merck will realize new marketing advantage opportunities. According to him, tapping into Medco’s promotion catalog result in market growth opportunities. The vice president suggests that the acquisition came in handy at a time of increased global competition. On the other hand, the chief financial officer is concerned about the viability of the acquisition. He wants to ascertain that our company recompenses a premium for Medco at $6.60 billion dollars. He postulates that the merger of the two firms will lead to a growth in earnings per share for the two companies. Although, he is still worried about the progress of the growth of the stock price of our company after Medco is purchased.

Major force driving this purchase

In the face of increased competition and changing health care settings, pharmaceutical companies must reinvent and restructure to remain competitive (Baker 45). In this regard, I believe that Merck should follow suit to guarantee its future success. Unlike in the past, managed care in the health care is gaining momentum in the United States. Through managed care plans, clients are offered medical cover and fundamental health care services. The services are offered through volume and long-standing contracts. Additionally, managed care programs offer comprehensive coverage for prescription medicines more often compared with conventional medical cover policies. Healthcare experts in America have projected that in the next 10 years, 90% of Americans will be accessing health care services through the managed care platforms.

The strategic feature of the change to managed care is that the accountability for the expense is based on decision-making with respect to the delivery of health care services unlike it is in conventional insurance policies (Weston & Mark 23). Through this approach, the repercussions for drug manufacturers like Merck are enormous. With medicine decision-making power moving away from medics to managed care experts and PBM managers, our marketing policies will swing their attention from thousands of medics to a few PMG managers. Owing to this, our company will experience an intense reduction in the sale powers of pharmaceutical manufacturers.

Merck should also expect other momentous deviations in industry structure. According to a number of industry specialists, with the growth in the number of managed care providers, it will become common for PBM to depend on a particular pharmaceutical firm to supply all of its medical merchandise and facilities instead of relying on a number of drug firms (Weston & Mark 63). The move will be an advantage to companies with manufacturing, delivery, and prescription management competencies. Furthermore, several professionals assert that only a few drug companies will survive on the international market in the coming years. Several firms are going to be eliminated in the market due to increased competition, and reduced profits. Based on the above illustrations, it is apparent that our company should acquire Medco to retain its competitive advantage in the market.

Role of prescription benefits management (PBM) companies

The duty of overseeing the delivery of prescription medicines is usually tendered out by the managed care companies to PBMs. The role of PBM firms comprises overseeing insurance claims, negotiating volume reductions with pharmaceutical makers, and enhancing the usage of cheaper generic alternatives. The administration of prescription assistance is boosted by the utilization of formularies and drug use appraisals. Formularies comprise lists of medicines hoarded by boards of pharmacologists and doctors in place of a managed-care firm. Associate doctors of the managed care organization are then intensely reinvigorated to recommend from the list during his or her daily roles. On the other hand, drug use appraisals comprise of assessing doctors’ prescribing arrangements and patients’ habits. Through this, the experts can recognize when a client may be getting the incorrect quantity or kind of drug and when an associate medic is not recommending it from a formulary. Fundamentally, this illustrates that an opportunity has been created for managed care firms to oversee prices and amalgamate decision-making power. Based on the above roles, I believe that our company should acquire Medco to seize the opportunity created by the growth of managed care in the health care sector.

Purpose predicted for the usage of database

Our company has identified Medco’s wide-ranging database as the key motivator for the purchase. With its database, the firm manages computer profiles of more than 33.1 million clients. The percentage represents 26% of all persons covered through pharmaceutical benefit policies. The company’s clients comprise treasure companies, national and state-run benefit plans, and a number of Blue Shield groups and assurance firms.

Countless prospects exist for our company to exploit the statistics enclosed in the company’s database. As such, the database will enable our company to recognize the medicines that could be swapped from an opponent’s medicine to a Merck’s medicine. After the acquisition, our pharmacists will recommend the shift to a patient’s medic. Through this, our opportunity of boosting sales is huge. Similarly, the database will enable our company to detect clients who fail to replenish their prescriptions. According to health records, failure by patients to replenish their medications leads to huge annual losses. In addition, through the acquisition, our company will have the capability to utilize Medco’s electronic patient catalog system. The above will act as a realistic laboratory with the objective of demonstrating to our clients that our drugs are worth the premium fee charged. The above will be achieved by recognizing the specific pills taken by our clients and merging the information with the clients’ medical records. In the long term, the strategy will enable Merck to launch the sovereignty of its products.

Further advantages of the union comprise $1 billion yearly savings in redundant advertising performances and a decrease in our sales team owing to additional detailed marketing plans resulting from the acquisition of Medco’s database. The saving will also be a result of the industry’s stress on delegating marketing to plan managers rather than the medics. Our acquisition of Medco is fundamentally an effort to intensify our market share in an industry with declining profits by exploiting the greatest valued strength in the pharmacological industry, which is information. Our acquisition is also aimed at enhancing our competitive rank in the emerging managed care pitch by associating with a PBM.

Competitive reactions that have taken place in response to our intentions to acquire Medco

Notably, our intentions to merge with PBM firms have been copied by our competitors. Based on this, we have to move with haste to ensure that the acquisition is attained within the shortest time possible. One company that has emulated our intention includes SmithKline Beecham. The company has publicized its intentions to purchase Diversified Pharmaceutical Services Incorporated. Another company that has emulated our strategy includes Roche Holdings Limited. The company has announced that they are planning to purchase Syntex Corporation. The above mergers are not only aimed at transforming the industry structure but also aimed at enhancing viability in the future.

Financial analysis

The financial gains of the acquisition of the company are manifold. I believe the purchase will create cost-efficacy through economies of scale. In the long term, the initiative will increase our company’s income through gains in market share. Through the proposed acquisition, our company will realize an increased value generation. I expect the company’s shareholder value to increase after the acquisition process is completed. The increase will surpass the summation of the shareholder values of the mother companies. The acquisition is also expected to result in tax gains. As indicated earlier, Merck’s acquisition of Medco will result in the generation of more value than the current generation of both companies. By exploiting Medco’s wide-ranging database, our company will be able to increase its sales and gain direct contact with millions of clients across the America. Through this, our company should expect to enhance its shareholder value.

In the last few years, Merck’s sales have stagnated. The situation has been caused by changing healthcare settings and increased competition. In this regard, there is an urge for the company to implement strategies aimed at enhancing its sales. Therefore, the acquisition of Medco will come in handy. The acquisition of this company will be beneficial to Merck in these financially challenging times. Based on our financial analysis, our company will lose millions of dollars in the near future if it fails to merge with a PBM firm. Medco’s experience in marketing will be a great asset to Merck. Through the acquisition, our company will emerge as a more competitive and cost-efficient company. The acquisition will enable Merck to survive through the difficult situation currently faced by a number of pharmaceutical companies because of increased competition and dwindling profits.

Equally, the acquisition will result in cost efficiency for Merck. Financial experts assert that when companies merge the united corporation benefits concerning cost-efficiency. A union between Merck and Medco will result in economies of scale. The situation will result in cost efficiency. As such, the union will enable Merck to focus on its core responsibility of manufacturing drugs. On the other hand, Medco will be able to focus on its role of marketing and promoting the drugs. Through specialization, the companies will be able to perfect their responsibilities ensuring that their products and services become affordable and competitive in the ever-changing health care market. Equally, the union of the two companies is likely to result in a new and robust company. With a bigger company, production will be enhanced. Thus, the cost of manufacturing pharmaceutical drugs per unit will lessen. The table below shows the projected sales in the next three years after the acquisition:

Table 1: the projected sales in the next three years after the acquisition

The table below illustrates the expected treasury stock transactions in millions after the acquisition in the next three years:

Table 2: the expected treasury stock transactions in millions after the acquisition in the next three years

Recommendation

Based on the above analysis, I recommend that Merck’s Acquisition of Medco should acquire Medco. As suggested by the executive vice president of sales & marketing, it is beyond doubt that through the acquisition Merck will realize new marketing advantage opportunities. The acquisition will enable us to exploit Medco’s promotion database for increased market growth. The financial benefits of the acquisition of Medco by our company are manifold. I believe the purchase will create cost-efficacy through economies of scale. In the long term, the initiative will increase our company’s income through gains in market share. Through the proposed acquisition, our company will realize an increased value generation. I expect the company’s shareholder value to increase after the acquisition process is completed. The increase will surpass the summation of the shareholder values of the mother companies. The acquisition is also expected to result in tax gains.

Our chief operating officer’s main concern of interaction and incorporation issues will be addressed through training and enhancing awareness of the importance of the proposed changes. By doing so, our employees will be physically and emotionally prepared to adjust to the proposed changes. Regarding the chief financial officer‘s concern, it is apparent that our company will recompense a premium for Medco at $6.60 billion dollars. Similarly, financial evidence suggests that the growth of Merck’s stock price will continue to progress after Medco is purchased.

Works Cited

Baker, H. Kent. The Art of Capital Restructuring Creating Shareholder Value through Mergers and Acquisitions. Hoboken, N.J.: Wiley, 2011. Print.

Weston, Fred, and Mark Mitchell. Takeovers, Restructuring, and Corporate Governance. 4th ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2004. Print.

Introduction

Accounting for business combinations has been characterized by numerous controversies with regard to financial reporting and financial market regulators have advanced varying interpretations and opinions. The pooling of interest method and the purchase method are some of the accounting methods that accountants have been utilizing extensively. The controversies between the two methods are due to the principle established by No. 16 of the Accounting Principles Board Opinion (Ayers, Lefanowicz & John, 2000). The principle postulates that the two methods can be used in the process of accounting for business combinations.

The purchase method requires an organization to “record the estimated fair value of all the liabilities and assets” (Dauber, Shim & Siegel, 2012, p.62). Therefore, accounting for assets and liabilities using the purchase method is not different from the normal treatment of assets and liabilities. If the price of a particular asset were higher than “the estimated fair value, the excess amount would be recognized as goodwill” (Dauber, Shim & Siegel, 2012, p.67). The goodwill was then amortized for duration of 40 years. However, the scenario has changed and the case is different. The direct cost of combination under the purchase method is capitalized as a component of the investment cost. Dauber, Shim, and Siegel (2012) assert that the “stock issuance costs are treated as a reduction of additional paid-in capital” (p.145). The acquiring firm should also ensure that relevant fair values are allocated to all liabilities and assets irrespective of whether they existed at the time of acquisition or not. Moreover, the total direct cost of acquisition must be accounted for as this cost relates to various issues for example legal fees and investment banking fees.

Main body

The pooling of interest method differs from the purchase method in a number of ways. First, “all the liabilities and assets of the firm being acquired were transferred to the acquiring firm’s financial accounts at its book value under the pooling-of-interest method” (Lehman, 2002, p.93). However, no goodwill was created. The pooling of interest method is used if common stocks are affected, which means that the resources of the two entities might not be distributed. Moreover, the acquisition transactions under the pooling of interest method are not settled through cash. The purchase accounting method leads to an increment in the acquiring firm’s annual income (Claude & Darroch, 2000). This aspect arises from the fact that the acquired firm’s income is included in the acquiring firm’s annual income statement as at the at the purchase date. On the contrary, the income of the acquired firm was integrated in the acquiring firm’s income statement as at the 1^st day of the firm’s reporting period irrespective of the date of acquisition. Moreover, “the acquired firm’s retained earnings were added to the acquiring firm’s retained earnings under the pooling method; however, the retained earnings of the acquired firm are not integrated in that of the acquiring firm under the purchase method; in addition, the direct cost of acquisition under the pooling method is expensed during the period of purchase” (Lehman, 2002, p.88). The purchase method was used to account for acquisitions while the pooling method was used to account for mergers.

The acquisition method can be compared to the pooling of interest and the purchase method in a number of ways. First, the acquisition method is mainly centered on the fair value of the firm being acquired. Furthermore, all the costs associated with in-process research and development [IPRD] incurred are recorded at their fair value on the date of acquisition. Under the purchase method, the acquiring firm is required to determine the fair value of the IPRD that might not be used in the future. This amount should be expensed immediately. The fair value of the IPRD is also determined under the acquisition method. However, the amount is treated as non-current assets. If the acquisition proves successful, the acquiring firm is required to amortize the IPRD of the assets acquired over their lifetime. However, if the acquisition fails, the acquirer should write off the IPRD of the asset. Direct costs of the business combination are expensed and contingent assets and liabilities are acknowledged under the acquisition method. However, under the purchase and the pooling of interest method, contingents are not acknowledged. The objective of this method is to improve the shortcoming associated with how assets and liabilities are recognized and measured under the two methods. All assets and liabilities under the acquisition method are recognized using their fair value. Recording transactions using fair value makes the financial statements of business combinations transparent and relevant. Thus, fair reporting of intangible assets, for example goodwill is attained.

Of the two, the acquisition method is more superior with regard to financial reporting in business combinations as it aids in the identification of liabilities and assets in a particular merger. Moreover, the method is also very objective in reporting. Through this method, assets and liabilities are recognized at their fair value on the acquisition data. The effectiveness of the acquisition method also emanates from the fact that it enhances cross border comparison of financial statements.

A number of differences stand out with regard to consolidations under the US Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). One of the differences relate to consolidation model. The difference in the consolidation model emanates from differences with regard to how economic benefits are determined. The second area of difference relates to de facto control and consideration of variable interest. Under the US GAAP, “the consolidation model mainly focuses on controlling an organization’s financial interest; therefore, the entities under consolidation are evaluated in order to determine their variable interest entities [VIE]” (Marcus & James, 2009, p.106). If the entity is a VIE, the next step entails following the guidance as stipulated under ASC 810, and “if the entity is not categorized as a VIE, the control of the entity is determined through voting rights” (Dauber et al. 2012, p. 98).

The consolidation model under the IFRS emphasizes on the control power. The control is defined as “the parent company’s ability to administrate on the entity’s operating and financial policies in order to obtain the desired benefits” (Lehman, 2002, p.119). However, control by the parent company only exists if the parent company holds more than 50%, either directly or indirectly, of the total votes. Moreover, the parent company’s voting rights should be determined.

The difference in the two standards is also evidenced by accounting for special-purpose entities (SPEs). Accounting for consolidation under the US GAAP requires one to determine whether the entity is a VIE or an SPE. SPEs are in some instances categorized as VIE, as they are thinly capitalized and highly structured. Decision making rights under the IFRS does not always indicate the degree of control mainly so in situations whereby the decision making rights with regard to SPE is limited or structured. Therefore, it is imperative for other control indicators to be integrated.

A higher degree of disclosure with regard to the entity’s connection to VIEs is required under the US GAAP. The need for extensive disclosure is to provide the users of financial statements with a high degree of understanding on diverse aspects such as the risks associated with the VIE. There are no SPE-specific disclosure requirements under the current IFRS standards. The only disclosure requirement relates to the relationship between the subsidiary and the parent company. Moreover, “the IFRS 12 requires the entities involved in the consolidation to disclose information that will assist financial statement users to determine the effect, nature, and risks associated with the consolidation” (Marcus & James, 2009, p.69).

The potential voting rights between the parent and the subsidiary company may lead to the existence of difference with regard to the investors’ degree of influence. Marcus and James (2009) add, “Potential voting rights under the US GAAP are not taken into account in the process of determining whether the investor has considerable influence” (p.73). On the other hand, potential voting rights are a major consideration under the IFRS. Therefore, the IFRS standard is focused at determining whether the influence of the investee. However, the potential voting is used in determining equity earnings of the investor.

Preparing consolidated financial statement under the IFRS and the US GAAP differs in a number of ways. The US GAAP permits the “consolidated and the reporting entities to report their financial statements under different year-ends for duration of 3 months; moreover, significant effects that might occur between the reporting dates are integrated in the financial statements” (Weil et al., 2012, p.129). On the contrary, consolidated financial statement of the subsidiary and parent companies are prepared on the same date.

Joint venture is one type of consolidation that is commonly being adopted; however, the term is defined differently under the US GAAP and the IFRS. The US GAAP standards define the term joint venture to include entities that are jointly controlled. On the other hand, the IFRS define the term joint venture to include contractual agreement involving two or more parties. The agreement outlines the economic activity that the two parties intend to undertake. The activity to be undertaken is usually under joint control, which means that each of the parties has a right on the economic activities being undertaken. Moreover, unanimous consent is required before implementing the economic activity.

Before determining the accounting model to adopt, the US GAAP requires one to determine whether the joint venture is a VIE or not. The equity method is mostly used in the process of “accounting for joint ventures under the US GAAP, but both the equity and the proportionate method of accounting for joint ventures can be adopted under the IFRS” (Weil et al. 2012, p.118). The accounting items are recorded under their fair value. The method selected is determined by whether the joint venture is jointly controlled. Moreover, the fair value is not used.

Conclusion

In my own opinion, I would recommend the IFRS reporting standards as the standards contribute to a high degree of financial reporting when accounting for consolidations. The IFRS reporting standards require the parent and the consolidated firm to report using the fair value on the date of consolidation.

Reference List

Ayers, B., Lefanowicz, C., & John, R. (2000). The financial statement effects of eliminating the pooling-of-interest method of acquisition accounting. Accounting Horizons, 14(3), 1-19.

Claude, L., & Darroch, R. (2000). Financial reporting: Purchasing versus pooling. Ivey Business Quarterly, 63(2), 12-13.

Dauber, N., & Shim, J., & Siegel, J. (2012). The complete CPA reference. Hoboken, NJ: Wiley.

Lehman, C. (2002). Mirrors and Prisms: Interrogating Accounting (Advances in Public Interest Accounting). Bingley, UK: Emerald.

Marcus, P., & James, W. (2009). Fundamentals of advanced accounting. New York, NY: Cengage.

Weil, R., Schipper, K., & Francis, J. (2012). Financial accounting: An introduction to concepts, methods and uses (14th ed.). Mason, OH: South-Western Cengage Learning.

Introduction

Businesses expand their operations due to an increase in sales attributed to efficient production, marketing and advertising strategies. Most businesses fail to achieve their targets due to management problems. In addition, some of them are forced to terminate their operations due to inflation, terrorism, competition and nature of their contracts (Bainbridge 34). However, some companies insist on continuing with their operations through merging or acquiring assets of other companies. This essay explains the consequences and circumstances surrounding mergers and acquisitions using the Mexichem and Dutch Peer case study.

Definitions

Mergers refer to situations where businesses decide to combine their investments and reduce operational costs. This application is common in companies which produce similar or related goods and services (Miller 23). For instance, when a shoe polish manufacturer combines and integrates its operations with a shoe manufacturing company this is called merging. On the other hand, acquisition refers to situations where a company decides to take over the operations of another company (Miller 24). For instance, when a car manufacturing company decides to sell its investments and production rights to a fuel exporting company this is called acquisition.

Similarities and Differences

A common similarity between merging and acquisition is that in both cases the participating companies combine their business operations and conduct their activities as one company (Bainbridge 36). Mexichem is a famous Mexican company that specializes in manufacturing plastic pipes and distributing them in and out of Mexico. Most consumers will not identify the presence of differences in the operations of these two companies since they perform their duties as one company. There are few adjustments in their management structure and communication channels to reflect the needs of both companies (Miller 29). In this case, both companies retain their identities and brand names while continuing to offer their goods or services to the public.

The only significant difference between acquisitions and mergers is that in the former arrangement businesses must agree that one of them will sell its assets and stock to the other operator. This means all debts and credits are transferred through signing sale agreements that show a company has been sold to another.

Significance of Mergers and Acquisitions

Merging allows companies to take advantage of economies of scale through reduced prices of purchases. At the moment, Mexichem enjoys economies of scale since it has a huge operating capital that allows it to buy goods in bulk. This capital gives it negotiating powers when placing orders for stationery or other equipment (Bainbridge 38). This reduces purchases and allows the company to have additional funds for other activities.

In addition, loss of jobs is inevitable when companies merge due to a combination of factors. In this case, Mexichem was the acquiring company and this means Dutch Peer had to sack its workers after compensating them. There is no way one company can be managed by two chief executive officers. Therefore, the company being acquired must lay off its workers.

Moreover, Mexichem acquired new technology that has helped it to strengthen its competitive edge and lead its competitors in technology applications and developments. There is no doubt that acquiring Dutch Peer was a beneficial undertaking that has not only increased profits but also maximized on Mexichem’s potentials.

Lastly, this company has improved and widened its visibility and publicity to existing and potential clients and has marketed its products to various destinations. Consequently, there has been a boost in revenue generation from the previous $145 to the present $180 million dollars. This proves the power of acquiring and merging with other companies to multiply production and boost sales. It is now easy for Mexichem to raise additional capital from financial institutions like banks since it has a well established capital base.

Conclusion

Mergers and acquisitions enable companies to combine their financial and human resources to develop their production and take advantage of prevailing conditions. Even though these activities have negative impacts like loss of jobs and business identities their advantages are more than these shortcomings.

Works Cited

Bainbridge, Stephen. Mergers and Acquisitions: Concepts and Insights. Minnesota: Foundation Press, 2012. Print.

Miller, Edwin. Mergers and Acquisitions: A Step-by-Step Legal and Practical Guide. New York: Wiley, 2009. Print.

Introduction

The merging and acquisition practices, which are generally practiced in business are regarded to be the inevitable processes of the development of companies, and the matters of improving the business performance, as merges of the companies, often cause changes in the stock market rates, thus, making the other companies analyze and assess the market situation. Moreover, it is an encouragement factor for the others, who wish to avoid the fall of their market shares and depreciation of their shares on the stock market. This paper aims to analyze the possible Barnes & Noble Inc merging or acquisition matters, as the valuations and variations of the stock market shares of this company appeared to be rather interesting.

Discussion

The possible scenario of merging or acquisition, associated with the variations of the stock market exchange, may be regarded in the context of the related feature of the multi-proof database. Originally, it entails the analysis of the company’s income rate (including the snapshot of the stock market rates), and is generally analyzed from the perspective of the proof history, which defines all the economic aspects of the company’s activity.

In accordance with the generally accepted scenario, once the multi-proof database is implemented into the business practice, the merge process starts. Thus, in accordance with the possible scenario, the steady merge looks the following:

1. Merging of the model.
2. Creating of the new proof history, on the basis of the principles of analyzing the merging factors, associated with union proof history.
3. Creating new proof-history from the very beginning.

Originally, these steps do not require the interaction of the entrepreneurs, who participate in the merging of the companies, thus, the person, who performs the merge will be able to review all the necessary data on the matters of the merge and the issues of the proof history.

The initial negotiations on the matters of merging and the perspectives of acquisition scenario may be associated with the necessities to discuss the profitability of the organization. Considering the fact that Barnes & Noble rose $3.29 to $21.29 at 5:05 p.m., after the close of regular trading on the New York Stock Exchange, there is a strong necessity to discuss the matters of the merging plan. Originally, Barnes & Noble adopted the proper plan, which was aimed at performing the merging process in about three years. This plan gives the shareholders the right to buy shares of a new series of preferred stock if an investor increases its stake to more than 20 percent of Barnes & Noble’s common stock. It also would take effect if an investor holding more than 20 percent buys more shares without board approval. In the light of this fact, the adequacy and enforcement of the company’s corporate governance policies should be regarded as the main ruling force of the merging process, thus, pointing out the necessity to perform the merging and acquisition scenarios taking into consideration the matters of the adequacy of the merging management.

Conclusion

Finally, there is a strong necessity to emphasize that the merging practices may be regarded similar to the acquisition and cooperation, nevertheless, with deeper consequences. These practices are associated with the matters of creating a proper scenario and providing the proper data of the company’s business performance.

Introduction

Instances of businesses purchasing their competitors or coming together to be more competitive are common occurrences in the business sector. Microsoft’s $45 billion proposed acquisition of Yahoo is one of the largest of such transactions. This venture offers a 62% t premium to present trading value for Yahoo. In the case of mergers, two or more firms join and come up with a new firm. In the case of acquisition, one firm buys another or other companies. Both mergers and acquisitions lead to a restructuring of the company’s administrations and operations. Merges and acquisitions are very strategic transitions for companies to enhance their performances and competitions. Although, initially it may negatively affect the new institution, in the long term it’s very profitable.

Cash and Securities as payment modes

When firms bid for acquisitions of others, they may choose to use cash or securities to settle transactional costs involved in the event a deal is reached. Usage of cash; a more prompt form of payment, is a preference to bidders who want to resolve any uncertainty about the transaction and maybe to gain potential investors confidence or to portray the bidder’s seriousness on the offer (Bruner 535). This could though be interpreted as a lack of confidence by target shareholders in the buyer’s future management of the enterprise if left in their hands and hence a call to the certainty of change of ownership. Securities such as common and preferential stocks whose values are less certain are also used to pay for acquisitions. The stocks may significantly vary in value upon announcement of the merger hence the form of payment calls for investors ready to participate in the future of the newly formed company.

Private Equity Funds

Historically, mergers and acquisitions involved the direct purchase of one operating firm by another. In the current takeover market, private equity funds (PEF) have played various important roles in the acquisition activity such as raising large equity capital from investors (Fruhan par. 4). This is easily attainable since PEFs receive deposits from a large pool of investors and control the type of investments the monies are engaged in. They also bid for and acquire operating firms as an investment using the equity capital together with borrowings that may be several times the equity capital they invest. Private equity funds normally change the acquired company’s management incentive scheme to give the management team a share of any shareholder’s wealth they successfully create. The board of directors of the operating firm gets to be dissolved and replaced by general partners of the PEFs who have a stake in the success of the firm. This is mostly to provide ultra motivation for success making the operating companies be managed in a manner as to generate maximum cash flow, before being resold within three to five years for a large capital gain.

Employee Stock Ownership Plans

Contrary to the common notion that employee stock ownership plans (ESOPs) are normally used for saving troubled companies, only a few of such plans are set up annually. Instead, ESOPs are more frequently used by successful business owners who no longer wish to retain their status in the business as a way of getting out of the company while rewarding employees and ensuring their commitment to the business. This sometimes helps a company generate the required capital for a takeover bid in the acquisition process. ESOP can also be accomplished by allowing the company to buy stock directly or giving stocks as a bonus for work well done. British banks that were bailed out by their government during the recent financial crisis currently use this method to pay for bonuses. Through the process, employees who get the stocks become shareholders and have a say in the decision-making process of the business. In case of a takeover, the employees can support or oppose the move since they have voting rights and are also extra motivated to work for they not only benefit from their salaries but also share the profits as partial owners through dividends (Fruhan par.5).

Spin-offs, equity carves-outs, and tracking stocks out

“A spin-off is the creation of an independent company through the sale or distribution of new shares of an existing business/division of a parent company” McClure (par. 1). A carve-out occurs when a business sells a minority stake in its subsidiary as an IPO or a rights issue and the percentage sold off is normally twenty or less. Tracking stock is issued by a company to trade in the stock exchange to measure the independent performance of a particular subsidiary. Businesses that are restructuring their operations can carry out spinoffs with the involved divisions expected to be more worthy independently than as parts of the larger business. Once the spin-off performance is confirmed as satisfactory, the remaining stake then undergoes the same at a later date and higher stock price. If a restructuring firm issues tracking stock, then the subsidiary concern has its entire activities separated from the parent business, and the tracking stock does not portray the entire performance of the company but of the specific division (McClure par. 4).

Conclusion

Based on the above circumstances, restructuring is inevitable in firms and in most cases tuned for the betterment of the specific companies that undertake it. A dynamic and innovative company with versatile employees has a competitive edge in a challenging market environment. Restructuring, therefore, improves performance, and mergers and acquisitions are some of the ways of achieving it.

Works Cited

Bruner, Robert. Applied Mergers and Acquisitions. New Jersey: John Wiley & Sons, 2004. Print.

Fruhan, Williams. “The Role of Private Equity Funds in Mergers and Acquisitions”. Harvard Business School. 2006. Web.

McClure, Ben.”Spinoffs”. Investopedia. 2010. Web.

Introduction

The acquisition of Cadbury Company which was a leading chocolatier by the Kraft Company was surrounded by controversies (Wright 2010, 3). The first initial bid by Kraft was 19.5 billion pounds and was expected to generate forty confectionary brands from the combined portfolio and each confectionary was expected to have an annual sale of one hundred pounds resulting to the leading producer of confectionary in the world (Yoder 2010, 5). Eventually the deal was completed after Kraft acquired Cadbury at an accepted bid of 11.7 billion pounds in order to own 72 percent of Cadbury shares (Davies & Williams 2009).

Criticism

The deal had a lot of deficiencies in that; Kraft just needed 50% shares plus one in order to take control of Cadbury (Sealy and Worthington 2007). The acquisition received criticism from the public and also from Peter Mandelson who is the United Kingdom business secretary when he met with Irene Rosenfeld (Kraft Chief Executive officer). According to Peter Mandelson, the acquisition would result to loss of 4,500 workers who worked for Cadbury. Kraft chief executive officer, Rosenfeld did not promise to offer any jobs for the employees but instead said through media that “the objective of the deal was to increase the sale of Cadbury and Kraft products” (Davies & Williams 2009).

According to Kraft’s CEO, “the top Leaders of Cadbury were to directly go but the Cadbury CEO Todd Stitzer and Chief Financial Officer Andrew Bonfield would help Kraft integrate Cadbury into the Northfield, Illinois-based food maker, but would step out of the direct chain of command” (Yoder 2010, 5). From a human resource management perspective the deal would result to negative impacts to the employment sector whereby the number of the unemployed people would increase (Deakin & Gillian 2004). This was evidenced by the large numbers of Cadbury employees who gathered in central London to urge the government to protect their jobs after the deal was made (Jones & Sufrin 2005).

According to analysts, “Kraft would delist the products that were manufactured by the combination of the two companies such as Cadbury’s Dairy Milk chocolate, Halls cough drops and Trident gum with Kraft’s once it acquired 75 percent of Cadbury shares” (Garfield 2010, 8). This would result to the total stop of the manufacture of the Cadbury products and it would even be delisted from the London Stock Exchange. The impact of this move by Kraft would result to the disappearance of Cadbury products in the market and as a result of this; employees and business people who traded these products would lose a lot.

Cadbury workforce union was left in suspense after Cadbury HR Director promised the union that Kraft would honuor the terms and the conditions and any previous undertaking by Cadbury (Lazarus 2009). The Cadbury HR Director further promised the employees that there would be a severance package for them and also a job centre would be created for them. This was not certain to happen since the acquisition deal did not have clear guidelines on the measures and the safety of the Cadbury employees. Rosenfeld stated that “UK will be the major beneficiaries in term of jobs with the current plan” (Whish 2003).

However, the request from the Cadbury staff to be offered with the guarantees that the company site would not be shut, their pension scheme would be obeyed and the terms and conditions were to be safe was not offered. The result of all this deal was lack of confidence in Kraft by the Cadbury employees even though Rosenfeld continuously promised an expansion in market and growth of the business (Pechenik 2009, 7).

References

Davies, J. & Williams, B. 2009. Mergers, acquisition and takeovers: The takeover of Cadbury by Kraft. London: The Stationary Office Limited.

Deakin, S. & Gillian, M. 2004. Labour Law. Washington: Hart Publishing.

Garfield, E 2010. Unions square up to Kraft to demand pay rise for Cadbury workers. Guardian, P.8.

Jones, A. & Sufrin, B. 2005. EC Competition Law: Text, Cases and Materials Oxford: Oxford University Press.

Lazarus, L. 2009. Understanding the Instant Impact of the Kraft-Cadbury Acquisition Negotiations on Hostile Takeover Bids and Other Acquisition Strategies (ExecSense Webinars). London: Oxford University Press.

Pechenik, J. 2009. Cadbury adopts Fair-trade source. The Independent, P.7.

Sealy, L. & Worthington, S. 2007. Cases and Materials in Company law, 8th Ed. Washington: Oxford University Press.

Whish, R. 2003. Competition Law, 5th Ed. Lexis: Nexis Butterworths.

Wright, M. 2010. Kraft, Cadbury, acquisition bid. Associated Press, P.3.

Yoder, S. 2010.Triple blow for Cadbury staff from Kraft deal. The Daily Telegraph, P.5.

Acquisition and procurement management is an integral part of any enterprise located in the economy of any country. However, special attention should be paid to this issue when it comes to government levels. The purpose of the paper is to explore the concept of acquisition management in the context of a Department of Defense through various case studies.

First of all, to analyze the management process, it is necessary to get acquainted with the basic concepts applicable to this topic. A country’s defense budget is not a single document, but a series of decrees, each of which can address this issue from different angles (Tyszkiewicz & Daggett, 1998). For the most accurate budgeting, the components must be allocated according to budgetary authority, commitment, and expenditure. In the United States, most of these powers are vested in Congress, thus determining the Department of Defense’s future funds. The distribution of these supplies occurs in three stages, among which the first two are the direct request for funds by the Department and the consideration of this application in Congress (Tyszkiewicz & Daggett, 1998). Only after this does the stage of actual management of the funds received to begin.

For the successful allocation of limited resources, a three-factor approach is used to determine the spheres of influence and, accordingly, their priority. The first and largest decision aid system is the Planning, Programming, Budgeting, and Execution Process, responsible for all funding processes for each department (Brown, 2010). The Joint Capabilities Integration and Development System is a somewhat narrower arrangement defining specific combat actions, details of operations, and associated technologies. Finally, The Defense Acquisition System concretizes the previous system’s requests and implements them in a practical application, i.e., specific systems used. All acquisition categories are broken down into three tiers to facilitate marketing decisions according to the scale of procurement and the level of authority required (Brown, 2010). For brevity, these levels are called ACAT and are numbered from top to bottom in descending order of cost and decision importance. Similar categories are defined for both weapon systems and support equipment and automatic data systems.

Thus, after the allocation of funds by Congress, allocating them to the necessary programs begins following the chain of authority. In general, this chain can be represented by four links, the lowest of which is the Program Manager (Brown, 2010). Each of them is responsible for a program and its actual execution. These individuals can report directly to the senior official in the form of a Component Acquisition Executive or through Program Executive Officers (Brown, 2010). Finally, the management chain is closed on the Defense Acquisition Executive, who are overseers over the entire process. However, despite their control, the final decision can be made by the immediate supervisors of specific programs, since, at this level, only basic management is carried out.

Members of this position are responsible for the allocation of resources within all Department of Defense systems. These include logistics, military structures, environmental safety, nuclear and biological threat surveillance, and finally, research and development (Brown, 2010). Particular attention is paid to this area, since it is the military sphere that primarily drives progress, helping to create breakthrough technologies. According to Sargent, Gallo, and Schwarz (2018), the importance of the Department of Defense’s influence on R&D was underlined by the overwhelming force of the United States in the global development arena. However, to date, America’s leadership in this area has declined due to the development of other countries and a decrease in allocated funds. According to Bangert, Davies, and Watson (2017), this increases the need for better management as the price of defense equipment escalates. Therefore, a revision of the current administration and resource allocation system is necessary as it can lead to an increasing cost cycle.

Thus, the management process in the Department of Defense is complex and multifaceted. Congress plays an essential role in determining the state’s defense budget, directly allocating the necessary funds. Only after this can the Department begin to distribute following the internal structure and the need for the development of a particular area.

References

Bangert, D., Davies, N., & Watson, R. (2017). Managing Defence Acquisition Cost Growth. The RUSI Journal, 162(1), 60-67.

Brown, B. (2010). Introduction to defence acquisition management. Washington, Government Printing Office.

Sargent, J. F., Gallo, M., & Schwarz, M. (2018). The global research and development landscape and implications for the department of defence. Congressional Research Service Report, 45403.

Tyszkiewicz, M. T., & Daggett, S. (1998). A defense budget primer. Library of Congress Washington DC Congressional Research Service.

Acquisition management is the collection of systems and tools that enable organizations to plan purchases, allocate funds, and execute transactions. Storing and processing information in this area allows managers to make purchases in the most systematic, convenient, and efficient way. One of the clearest examples of a quality acquisition management system is DoD. First, it has various technical means to make the process more convenient. This includes hardware, software, manuals, and other details. Second, the process of buying goods is elaborate and systematic. It includes not only purchasing, but also testing, production, support, and other stages. Third, it is essential to note the competent management of the DoD acquisition management system. This includes planning, organizing, leadership, and human resources (Brown, 2010). Thus, the DoD is an example of a well-functioning acquisition management system.

There are several challenges faced by purchasing decision-makers and analysts. Many of them are related to the area of ​​financing, as the allocation of funds is not always an easy task. Thus, these people need to prioritize correctly to spend funds on the essentials. In this process, analysts must intelligently identify the critical needs, and decision-makers must confirm or refute their ideas. Thus, some acquisitions may be rejected, but as a result, the organization will be able to receive the highest priority goods and services.

One of the most interesting points of acquisition management is the external factors that influence it. These include, for example, politics, media, emergencies, and other aspects of the organization’s activities (Tyszkiewicz and Daggett, 1998). As a consequence, acquisition management becomes a complex and challenging task. The versatility of acquisition management success should also be noted. Success is measured in different ways: timeliness, balance, profitability, and other factors (Tyszkiewicz and Daggett, 1998). Undoubtedly, this complicates the task but allows clear recognition of the requirements of different stakeholders.

To support the activities related to acquisition management, actions need to be taken in different areas. This applies to staff training, budget allocation, public relations, and many other aspects of the organization’s functioning. Each of them should be given special attention so that they do not contradict each other and work for the company’s good. In particular, this applies to saving money, hiring experienced employees, and creating a positive image in the media.

References

Brown, B. (2010). Introduction to defence acquisition management. Washington, DC: U.S. Government Printing Office.

Tyszkiewicz, M. T., & Daggett, S. (1998). A defence budget primer. Washington, DC: U.S. Government Printing Office.

Motives for Takeovers: An Empirical Investigation

This article discusses the three main motives for takeovers which include synergies, agency, and hubris. It aims to provide a clear difference between these three motives despite their simultaneous existence in any model of takeovers. This article uses the mode of studying the correlation among the total and target gains to differentiate these competing hypotheses. The correlation is supposed to stay positive in case synergy is the takeover motive, negative in case agency is the takeover motive, and nil if hubris leads to the takeover.

The three hypotheses were tested by analyzing 330 samples of tender offers between 1963 to 1988 and the subsamples to establish negative and positive total gains. The results of the analysis indicated that, on average, takeovers produce total positive gains. This outcome is seen in approximately 75% of the takeovers. There is a positive connection between the targeted and total returns in the subsample of overall positive gains, indicating that the synergy motivation is the most prevalent (Chen & Ullah, 2018). Moreover, a negative inter-relation occurs for the subsample with total negative returns, suggesting that agency is the predominant motivator. Similarly, the presence of hubris is apparent, at least in the subsample with absolute positive gain.

This paper effectively provides more understanding of the difference between the three motives for takeovers. It successfully answers most of the questions left unanswered by the previous researchers through the study, analysis, and control of various variables, including competing bidders and varying mediums of exchange. Nevertheless, the survey conducted by the researchers would have provided a more conclusive result if they had included more variables in their study. The analysis of other variables such as the type of industry and the size of competing bidders would have clearly shown the motivation for takeovers.

The Effect of Mergers and Acquisitions on Environmental, Social and Governance Performance and Market Value: Evidence from EU Acquirers

This article describes consequences of ESG (environment, society, and governance) performance on the market worth as well as the procedures in the acquisitions and merger setting. It determines if acquiring targets who possess improved ESG performance may assist acquirers in boosting ESG performance and if the marketplace positively views augmented ESG performance. The authors also examine if the acquisitions of targets who have healthier ESG performance affect the acquirer’s market value.

This research of the consequences of merger and acquisitions was conducted using a selection of 100 European buyouts from 2003 to 2017, since the relevant statistics in regards to the ESG performance of the procuring as well as target corporations are presented. The study outcomes indicate that the post-merger ESG result of the acquirers rise after they attain a firm that has improved ESG result compared to that of the buyer in the pre-merger phase (Tampakoudis & Anagnostopoulou, 2020). However, the acquirer’s post-merger market worth rises after the post-merger ESG presentation of the acquirer increases with its pre-merger ESG performance. Additionally, the article shows a positive relationship amid the acquirer’s post-merger market worth and the procurement of a new company with a healthier ESG result in the pre-merger period.

The researchers in this paper effectively explored ESG result as a company worth driver and an M&A predecessor. Since the impacts of acquisitions and mergers are perfectly demonstrated, the findings of this research are more beneficial to corporate investors, administrators, and legislators. Moreover, the research attempts to provide more insight into the correlation between M&A, SRI, corporate performance, and ESG performance. However, the investigation would have yielded more definite results if ESG data had been provided for the targets and acquirers. Their inability to match the ESG scores of the target and acquirer reduced the number of events that were included in the analysis; hence the results cannot be generalized.

Explaining the Premiums Paid for Large Acquisitions: Evidence of CEO Hubris

Managers typically overpay for target companies for three reasons: synergies, agencies, as well as hubris. Past studies have only found hubris when there are overall negative outcomes following acquisitions. Still, it does not elucidate the concept of managerial hubris to identify the number of premiums paid for a purchase. This article provides the solution to these shortcomings by analyzing three significant properties: the recent performance of the acquirer firm, contemporary media praise, and the degree of self-importance of the acquirer CEO. The researchers theorized a positive relationship between the three properties and the amount of premium paid for acquisitions.

The research was conducted on all publicly traded firms involved in acquisitions with payments exceeding $100 million in 1989 and 1982. The years are chosen to examine robustness over varied economic environments, 1989 was a boom year, and 1992 was a trough year for mergers and acquisitions (Arena et al., 2017). The study results indicate that the premium paid for investments positively correlates with the recent performance of the acquirer, media phrase, and the relative pay of the CEO. Furthermore, the paid premiums were vastly connected to the collective hubris factor.

This paper provides a great analysis of the association between premiums paid for acquisitions and the characteristics of the CEOs. It clearly shows that the nature of the CEO has a significant effect on the premiums paid for large investments when using hubris. Nevertheless, the researchers ought to have included a control for more variables to increase the sample size and show how they affected the hubris and the premium paid for target firms.

Gains to Bidder Firms Revisited: Domestic and Foreign Acquisitions in Canada

The bulk of trade acquisition studies indicates that bidding companies in the US achieve basically minimal profits. Despite numerous evidences demonstrating that rivalry between many bidder firms energizes procurement fees to the intended stakeholders, it is also well known that considered bidder anomalous yields occasionally have a reduction bias. This predisposition may happen when the buyer is close to the target or when a market takeover is predicted due to the dealer’s track record as a regular acquirer. As a result, assessing the correct performance of US dealers is difficult.

This article analyses a broad sample of foreign and domestic procurements in Canada to address the argument over the accurate increases to bidder firms. The authors conduct multiple kinds of research into the possible cause of the differential performance of the local and foreign bidder companies. The study results confirm that the marketplace is inclined to positively respond to local propositions where the imbursement is made using bidder shares. Also, the outcome indicates that domestic acquisitions are more profitable in cases where the buyer and the target have similar total equity scopes.

This paper investigates various variables to show how the performance of local and foreign bidder organizations differs. The authors also record the frequency of similar acquisitions across the domestic and U.S bidders. They incorporate operational tests of numerous hypotheses that the marketplace allocates exact preceding acquisition prospects listed in the sample. The limitation of the study is its failure to efficiently analyze the causation against the correlation of the presented variables. This incorporation would have improved the credibility of the results hence making it more conclusive.

References

Arena, C., Michelon, G., & Trojanowski, G. (2017). Big egos can be green: A study of CEO hubris and environmental innovation. British Journal of Management, 29(2), 316-336.

Chen, X., & Ullah, S. (2018). Motives and consequences of White Knight takeovers. Journal of Corporate Accounting & Finance, 29(3), 47-69.

Tampakoudis, I., & Anagnostopoulou, E. (2020). The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers.Business Strategy and The Environment, 29(5), 1865-1875.