“IDEAL” ACQUISITION INTEGRATION APPROACHES IN RELATED ACQUISITIONS OF EQUALS: A TEST OF LONG-HELD BELIEFS

Abstract

Despite the recent slow down in overall activity, acquisitions continue to be a popular growth strategy used by firms competing in a globally competitive marketplace (Duck, Sirower & Dumas, 2002). At the same time, acquisitions are more of a complex phenomenon than ever in that the conditions under which they enhance or destroy firm value still remain unclear despite the wealth of acquisition studies in finance and management. In fact, recent studies by several major consulting and advisory services firms provide evidence that at a minimum one-third to one-half of these deals fail to achieve anticipated benefits, cost savings and other outcomes (KPMG, 1999; Mergerstat, 2000; PricewaterhouseCoopers, 2000). Even more alarming, the latest reports released by Booz Allen and Hamilton (2001) and BusinessWeek (Henry, 2002) indicate that this “failure” to deliver announced benefits and improvements in shareholder wealth increases to over 60% when examining large M&As which typically bring together two firms that not only compete in similar product or market domains but also have comparable size positions. Thus, the question lingers…What distinguishes those acquisitions that are successful in meeting intended goals and performance improvements from those that are not successful?

Citation

Ellis, K.M. and Lamont, B.T. (2004), "“IDEAL” ACQUISITION INTEGRATION APPROACHES IN RELATED ACQUISITIONS OF EQUALS: A TEST OF LONG-HELD BELIEFS", Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 3), Emerald Group Publishing Limited, Leeds, pp. 81-102. https://doi.org/10.1016/S1479-361X(04)03004-2