Mergers and acquisitions continue to be a popular and highly efficient strategy for corporate development. This represents a complex phenomenon that attracts the research attention and interest of a wide range of management disciplines that encompass the financial, behavioural, strategic, cross-cultural, and operational aspects of this high-risk, challenging, yet highly rewarding activity. The main focus of strategic management researches in the M&A field have always been on the determination of process and strategic factors that could explain the performance variance between individual mergers and acquisitions—something that is extremely beneficial for CFOs in terms of identifying acquisition targets, conducting industry analysis, constructing financial models, and capturing investor and street opinion on similar transactions. Accurate and comprehensive research and study throughout the entire M&A process is extremely important to ensure long-term success, regardless of the industry the business is in.
Every merger and acquisition starts with a tender offer. The M&A process typically begins with the acquiring company discreetly and carefully buying up shares in the company being acquired or building a position in the target organisation. The tender offer is then advertised in the business press, along with the offer price and the date by which shareholders in the target company must respond with an acceptance or rejection.
The target company's response could be one of several things: acceptance of the offer and its terms, an attempt to negotiate, an execution of a poison pill or a hostile takeover defence, or finding a white night that will offer an equal or higher price than what the hostile bidder is offering. It is precisely because of these possible responses that careful research and evaluation must be done before making any move towards an M&A. Because M&As are extremely complex, premature mergers and acquisitions that didn't go through rigorous study fail miserably and usually incur more loss than gain for companies.
Every merger and acquisition starts with a tender offer. The M&A process typically begins with the acquiring company discreetly and carefully buying up shares in the company being acquired or building a position in the target organisation. The tender offer is then advertised in the business press, along with the offer price and the date by which shareholders in the target company must respond with an acceptance or rejection.
The target company's response could be one of several things: acceptance of the offer and its terms, an attempt to negotiate, an execution of a poison pill or a hostile takeover defence, or finding a white night that will offer an equal or higher price than what the hostile bidder is offering. It is precisely because of these possible responses that careful research and evaluation must be done before making any move towards an M&A. Because M&As are extremely complex, premature mergers and acquisitions that didn't go through rigorous study fail miserably and usually incur more loss than gain for companies.
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