M&A: How to Align Managerial Strategy to Post Transaction Value

Merger and acquisition (M&A) activity accounts for trillions of dollars and currently fails to be productive at rates of 50 to 75%. Agency theory established a foundation for an inherit conflict between management goals and the needs of the shareholders which may account for this failure rate. The purpose of this book is to show the results of a study of 35 US M&As from 1998 to 2002 and the relationship between managerial intention as stated in SEC required 10-K statements and M&A success. A unique aspect of this study was to measure the achievement of managerial strategy by relating the objectives of M&As through senior management's own words and the evidence of achievement of those intentions through analysis of financial statements. This study illustrates that management does not establish clear outcomes for measuring success of M&A events since an alignment between motives and measures is not established with accounting measures related to success showing no positive change. The model established here is intended for management involved in M&A, boards of companies pursuing M&A, stakeholders of companies involved with M&A and M&A researchers.

Autorentext

Dr. Stephen Paulone is currently Director of Graduate Business Programs for the Malcolm Baldrige School of Business at Post University. Dr. Paulone holds a DBA in Financial Management. His areas of expertise include; M&A, E-business, New Product Development, Program Management, Business Process Reengineering, Financial and Marketing Management.

Klappentext

Merger and acquisition (M&A) activity accounts for trillions of dollars and currently fails to be productive at rates of 50 to 75%. Agency theory established a foundation for an inherit conflict between management goals and the needs of the shareholders which may account for this failure rate. The purpose of this book is to show the results of a study of 35 US M&As from 1998 to 2002 and the relationship between managerial intention as stated in SEC required 10-K statements and M&A success. A unique aspect of this study was to measure the achievement of managerial strategy by relating the objectives of M&As through senior management s own words and the evidence of achievement of those intentions through analysis of financial statements. This study illustrates that management does not establish clear outcomes for measuring success of M&A events since an alignment between motives and measures is not established with accounting measures related to success showing no positive change. The model established here is intended for management involved in M&A, boards of companies pursuing M&A, stakeholders of companies involved with M&A and M&A researchers.