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The impact from pre-M&A resource allocation on the post-M&A performance

Ritterfeldt, Andreas and Piehl Trygg, Sven (2008)
Department of Business Administration
Abstract
Background: When firms grow through acquisitions it is commonly debated whether the two entities ought to be better off as standalone companies rather than as a merged company. This thesis aims at discussing this issue of M&As advantages and disadvantages in terms of source of synergies from the perspective of resource allocation. Purpose: The purpose of this thesis is to describe and analyze to what extent pre-M&A differences (against similarities) in resource allocation and corporate culture between the acquiring and target firm have an impact on the post-M&A performance. Theoretical framework: Efficient market hypothesis, resource based view, strategic fit. Methodology: A longitudinal study is conducted on the EU market during 1992 to... (More)
Background: When firms grow through acquisitions it is commonly debated whether the two entities ought to be better off as standalone companies rather than as a merged company. This thesis aims at discussing this issue of M&As advantages and disadvantages in terms of source of synergies from the perspective of resource allocation. Purpose: The purpose of this thesis is to describe and analyze to what extent pre-M&A differences (against similarities) in resource allocation and corporate culture between the acquiring and target firm have an impact on the post-M&A performance. Theoretical framework: Efficient market hypothesis, resource based view, strategic fit. Methodology: A longitudinal study is conducted on the EU market during 1992 to 2002 based on balance sheet and income statement data. Thereafter a multiple regression analysis was used to find which, how and to what extent different pre-M&A resource allocation differences impact the post-M&A performance. Conclusion: This thesis presents a more nuanced view upon resource allocation than previous research. Namely, it indicates that it is favorable to have similarities in some and dissimilarities in some aspects of resource allocation in order to generate positive impacts on post-M&A ROA. Also the different allocation aspects relative importance is an additional contribution by this thesis. (Less)
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author
Ritterfeldt, Andreas and Piehl Trygg, Sven
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Resource allocation, M&A, ROA performance, Synergies, Management of enterprises, Företagsledning, management
language
Swedish
id
1338676
date added to LUP
2008-06-05
date last changed
2012-04-02 17:07:18
@misc{1338676,
  abstract     = {Background: When firms grow through acquisitions it is commonly debated whether the two entities ought to be better off as standalone companies rather than as a merged company. This thesis aims at discussing this issue of M&As advantages and disadvantages in terms of source of synergies from the perspective of resource allocation. Purpose: The purpose of this thesis is to describe and analyze to what extent pre-M&A differences (against similarities) in resource allocation and corporate culture between the acquiring and target firm have an impact on the post-M&A performance. Theoretical framework: Efficient market hypothesis, resource based view, strategic fit. Methodology: A longitudinal study is conducted on the EU market during 1992 to 2002 based on balance sheet and income statement data. Thereafter a multiple regression analysis was used to find which, how and to what extent different pre-M&A resource allocation differences impact the post-M&A performance. Conclusion: This thesis presents a more nuanced view upon resource allocation than previous research. Namely, it indicates that it is favorable to have similarities in some and dissimilarities in some aspects of resource allocation in order to generate positive impacts on post-M&A ROA. Also the different allocation aspects relative importance is an additional contribution by this thesis.},
  author       = {Ritterfeldt, Andreas and Piehl Trygg, Sven},
  keyword      = {Resource allocation,M&A,ROA performance,Synergies,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {The impact from pre-M&A resource allocation on the post-M&A performance},
  year         = {2008},
}