Write a paper in which you compare and contrast M&A failures.
- Consider what happens to the stakeholders, company image, price per share, market share, company assets, industry position, goodwill, and service capability. Once the failure of an M&A occurs, what happens to assets of both companies?
- Compare and contrast two to three forms of corporate restructuring. Would you recommend any of the following?
- Defend your position.
- Format your paper according to APA Standards. No Plagiarism and Properly Cited.© BrainMass Inc. brainmass.com June 4, 2020, 12:57 am ad1c9bdddf
- Discuss reasons why an M&A fails, such as technical and legal insolvency, and bankruptcy.
There are several reasons why mergers and acquisitions fail and lead to technical and legal insolvency. When a merger & acquisition takes place there is great expectation that there will be economies of scale however, these economies are not realized. The reason is that the technology used by both the companies is substantial and the joint management of the company leads to dis-economies instead. There are clashes between managements because of cultural divide, and there are conflicts between departments of different companies. After merger & acquisition the company suddenly becomes very large and the management is unable to deal with the suppliers or the distributors. Instead of extracting bargains from suppliers the merged company often succumbs to supplier pressures. Further, the merger that is intended to give the company an enhanced market share fails in the market place because it is not able to develop an integrated marketing strategy that addresses the market needs. The result is that there is duplication of effort and higher costs (Hunt.P, 2009).
Technical and legal bankruptcy occurs when there is inefficient management. In a large number of cases the selection of the company for merger & acquisition is appropriate but once the merger takes place, management fails to bring about integration and realize the intended synergies. The top personnel in both the companies worry about their jobs, their position, and the effect on their careers. In addition, there are several cases where the company that has been acquired does not fit the parent company's strategy. Consider the example of the acquisition of Salomon by Adidas. The company did not fit the core strengths of Adidas in about six years time Salomon and its components were divested by Adidas. The ...
This answer provides you an excellent discussion on corporate restructuring