企业并购文献综述及外文文献资料

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1、本文档包括改专题的：外文文献、文献综述一、外文文献Financial synergy in mergers and acquisitions. Evidence from Saudi ArabiaAbstractBusinesses today consider mergers and acquisitions to be a new strategy for their companys growth. Companies aim to grow through increasing sales, purchasing assets, accumulating profits and gai

2、ning market share. Thus; the best way to achieve any of the above-mentioned targets is by getting into either a merger or an acquisition. As a matter of fact, growth through mergers and acquisitions has been a critical part of the success of many companies operating in the new economy. Mergers and a

3、cquisitions are an important factor in building up market capitalization. Based on three structured interviews with major Saudi Arabian banks it has been found that mergers motivated by economies of scale should be approached cautiously. Similarly, companies should also approach vertical mergers cau

4、tiously as it is often difficult to gain synergy through a vertical merger. Firms should seek out mergers that allow them to acquire specialized knowledge. It has also been found that firms should look for mergers that increase market power whilst avoiding unrelated mergers or conglomerate mergers.K

5、eywords: Synergy, Mergers and Acquisitions, Saudi Arabia 1. IntroductionThere is a major difference between mergers and acquisitions. Mergers occur between similarly sized companies and the collaboration is friendly between both companies. However, Acquisitions often occur between differently sized

6、companies and the partnership is usually forced and hostile.Wheelen and Hunger (2009) define a merger as a transaction involving two or more corporations in which stock is exchanged but in which only one corporation survives. In other words, the two companies become one and the name for the corporat

7、ion becomes composite and is derived from the two original names. Furthermore, an acquisition is the purchase of a company that is completely absorbedas an operating subsidiary or division of the acquiring corporation (Wheelen and Hunger, 2009). The authors also state that hostile acquisitions are c

8、alled takeovers. The main reason for firms entering into mergers and acquisitions (M&A) is togrow, and companies grow to survive (Akinbuli, 201 2). Growth strategies expand thecompanys activities and add to its value since larger firm have more bargaining power than smaller ones. A firm sustaining g

9、rowth will always have moreopportunities for advancement, promotions and more jobs to offer people (Wheelen and Hunger, 2009). In general, mergers and different types of acquisitions are performed in the hope of realizing an economic gain. For such a business deal to take place, the two firms involv

10、ed must be worth more together than each was apart.A few of the prospective advantagesof M&A include achieving economies of scale, combining complementary resources, garnering tax advantages, and eliminating inefficiencies. Other reasons for considering growth through acquisitions contain obtaining

11、proprietary rights to products or services, increasing market power by purchasing competitors, shoring up weaknesses in key business areas, penetrating new geographic regions, or providing managers with new opportunities for career growth and advancement (Brown, 2005).Many firms choose M&A as a tool

12、 to expand into a new market or new area of expertise since it is quicker and cheaper than taking the risk alone. Furthermore, M&A happen when senior executives feel enthusiastic and excited about a potential deal ; the idea of successfully pursuing and taking over another company before the company

13、 s competitors are able to do so. Competition in a growing industry drives firms to acquire others. In fact, a successful merger between companies increases benefits for the entire corporation.However, failures also occur in M&A as indicated by Haberbserg and Rieple (2001) and Akinbuli (2012). They

14、showed that 50% of acquisitions are unsuccessful; they increase market power but do not necessarily increase profits. Brown (2005) explains the reasons for the high failure rate of M&A as follows:(a) Over-optimistic assessmentof economies of scale. Economies of scale are usually achieved at certain

15、business size. However, expansion beyond the optimumlevel results in disproportionate cost disadvantages that lead to various diseconomies of scale.(b) Inadequate preliminary investigation combined with an inability to implement the amalgamation efficiently. Resistance to change and the inability fo

16、r the acquired company to manage change well is a main reason for failure due to theresistance of the employees and management of both companies involved.(c) Insufficient appreciation of the personnel problems, which will arise, is due mainly to the differing organizational cultures in each company.

17、(d) Dominance of subjective factors such as the status of the respective boards of directors.Therefore, drafting careful plans before and after the merger is a necessity that should not be overlooked. Some companies find the solution in hiring a changemanager who will add value and better manage the

18、 transition of the marriage between both companies (Brown, 2005).2. Synergy in M&A and financial synergyThis section discusses the literature review in order to identify the importance of acquiring financial synergy in the M&A.2.1 Synergy in M&ASynergy, as defined in the business dictionary, is the

19、state in which two or more agents, entities, factors, processes, substances, or systems work together in a particularly fruitful way that produces an effect greater than the sum of their individual effects. Synergy is the magic force that allows for enhanced cost efficiencies of the new business. Sy

20、nergy takes the form of revenue enhancement and cost savings (Mergers and acquisitions: Definition, n.d.).Synergy is also expressed as an increase in the value of assets as a result of their combination. Expected synergy is the justification behind most business mergers. For example, the 2002 combin

21、ation of Hewlett-Packard and Compaq was designed to reduce expenses and capitalize on combining Hewlett-Packards reputation for quality with Compaqs impressive distribution system (Synergy Business Definition, n.d.).Through research ithas been noted that synergy is the concept that twobusinesses wil

22、l generate greater profits together than they could separately (Wheelen and Hunger, 2009). Synergy is said to exist for a divisional corporation if the return on investment of each division is greater than what the return would be if each division were an independent business (Wheelen and Hunger, 20

23、09). In order to succeed cooperation between the partners is the basic ingredient for achieving growth through synergy (Rahatullah, 201 0). This requires partners to build trust, commitment, and secure consensus, to achieve their targets (Gronroos, 1997; Ring and Van-de-Ven, 1994).Synergy can take s

24、everal forms. According to Goold and Campbell (1 998) synergy is demonstrated in six ways: benefiting from knowledge or skills, coordinated strategies, shared tangible resources, economies of scale, gaining bargaining power over suppliers and creating new products or services.M8A result in the creat

25、ion of synergies, the sharing of manufacturing facilities, software systems and distribution processes.This type of synergy is referred to as operational synergy and is seen mostly in manufacturing industries. Another motive for forming an acquisition is gaining greater financial strength by purchas

26、ing a competitor, which increases market share. The aim of mergers and acquisitions is to achieve improvement for both companies and produce efficiency in most of the companys operations. (Haberberg and Rieple, 2001).However, Brown (2005) summarizes the sources of synergy that result fromM8A under t

27、he following headlines:1. Operating economies which include:(a) Economies of scale: Horizontal mergers (acquisition of a company in a similar line of business) are often claimed to reduce costs and therefore increase profits due to economies of scale. These can occur in the production, marketing or

28、finance divisions. Note that these gains are not expected automatically and diseconomies of scale may also be experienced. These benefits are sometimes also claimed for conglomerate mergers (acquisition of companies in unrelated areas of business) in financial and marketing costs.(b) Economies of ve

29、rtical integration: Some acquisitions involve buying outother companies in the same production chain. For example, a manufacturer buys out a raw material supplier or a retailer. This can increase profits through eliminating the middleman in the supply chain.(c) Complementary resources: It is sometim

30、es argued that by combining the strengths of two companies a synergistic result can be obtained. For example,combining a company specializing in research and development with a company strong in the marketing area could lead to gains. Combining the expertise of both firms would benefit each company

31、through the gained knowledge and skills that individually they lack.(d) Elimination of inefficiency: If either of the two companies had been badly managed; its performance and hence its value can be improved by the elimination of inefficiencies through M&A. Improvements could be obtained in the area

32、s of production, marketing and finance.2. Market power; Horizontal mergers may enable the firm to obtain a degree of monopoly power which could increase its profitability. Coordinated strategies between both companies will lead the entire organization in gaining competitive advantage. Gaining bargai

33、ning power over suppliers is realized since the company is larger in size after the merger.3. Financial gains; Companies with large amounts of surplus cash may see the acquisition of other companies as the best application for these funds. Shared tangible resources such as sharing a bigger building,

34、 more office supplies, equipment, manufacturing facilities and research and design labs will also lead to a reduction in costs translated into better financial performance. McNeil (2012) identifies that the shareholders of a business under M&A process may benefit from the sale of their stocks, this

35、is especially true if the M&A is with a better, bigger and more reputable prospective partner.4. Others; such as surplus management talent, meaning that companies withhighly skilled managers can make use of their qualified personnel only if they have problems to solve. The acquisition of inefficient

36、 companies allows for maximumutilization of skilled managers. Incorporating the efforts of bothmanagement teamswill drive the creation of innovative products or services.The synergy factor prevails in the M&A when the firms produce a greater return than the two individual firms owing to reasons such

37、 as improvements in efficiency and an increase in market power for the merged or acquired firms (Berkovitch and Narayana, 1993).2.2 Financial synergyAs defined by Knoll (2008), financial synergies are performance advantages gained by controlling financial resources across businesses of firms. There

38、exist four types of financial synergies, which are:1. Reduction of corporate risk: Reduction of corporate risk is increasing the risk capacity of the overall firm, which means the ability of the firm to bear more risk. Meaning that by increasing the risk capacity the shareholders will invest more in

39、 the company and the firm will gain benefits such as coinsurance effects.2. Establishment of internal capital market: Establishing internal capital gains means that the firm will decrease its financing costs and will increase financial flexibility which results in the company having higher liquidity

40、 and the ability to pay its creditors easily.3. Tax advantages: Tax advantages by reducing the tax liabilities of the firm using the losses in one business to offset profits in the other business referred to as profit accounting.4. Financial economies of scale: Financial economies of scale reducing

41、transaction cost in issuing debt and equity securities (Knoll, 2008).3. Methodology and resultsFor this project, the method of interviews was used due to it being the most appropriate way to gather information about the interpretation of events, as to why some mergers produce synergy while others do

42、 not; and to understand the reasons why companies enter into mergers. In Saudi Arabia it is difficult to secure responses from senior executives. Approaching such a person is not only difficult protocol wise but there are bureaucratic hurdles. The quantitative analysis is more suitable for large sca

43、le data collection (Denzin and Lincoln, 1997). Whereas, qualitative researchprovides the researcher with the perspective of target audience members through captivation and direct interaction with the people under study (Glesne and Peshkin, 1992). These methods help to comprehend what others perceive

44、 of a certain phenomenon, postulates Creswell (1994).The planned interview method was to use a structured interview. In a structuredinterview, the researcher knows in advance what information is needed and asks a predetermined set of questions (Sekaran and Bougie, 2009). The same questions are asked

45、 of all interviewees, which allows for better comparison of the responses than unstructured interviews, where the interviewees are asked different questions. The structured interview process does allow the researcher to ask different follow up or probing questions based on the interviewees response.

46、 This allows the interviewer to identify new factors and gain a deeper understanding of the topic (Sekaran and Bougie, 2009).Since the interviewees were located in different parts of Saudi Arabia the interviews were scheduled in advance and conducted face to face. The data was gathered by taking not

47、es during the interviews, which were not recorded as that may have seemed too intrusive.When conducting interviews it is important to conduct them in a manner that is free of bias or inaccuracies. According to Sekaran and Bougie (2009), bias can be introduced by the interviewer, interviewee or the s

48、ituation. Interviewers can introduce bias by distorting the information that they hear so it aligns with their expected responses to the question or through simple misunderstandings. To prevent this, the respondents answers were summarized back to them before moving on to the next question. Intervie

49、wees can introduce bias if they do not like the interviewer or if they phrase the answers to be biased towards what they think the interviewer wants to hear. Since the interviewees were obtained through referrals, it is highly unlikely that they gave false responses. Also, the basic area of research

50、 was discussed with the interviewees, but no hypothesis was advance to them, such that they would skew their answers to what they though the interviewer wanted to hear.Three companies were interviewed and asked a specific set of questions (seeAppendix). There are numerous reasons to interview three

51、companies in Saudi Arabia.These are the following:* The M&A in Saudi Arabia are normally carried out by large size companies.* It is difficult to reach out to the senior managers to discuss such issues.* The officers are also tied by company confidentiality rules to not divulgeinformation.* The numb

52、er of M&A is also significantly less in comparison with other countries.* The researchers, using diverse resources including personal contacts and formal requests, were able to reach out to three of the major companies of the Kingdom.An interview was conducted with National Commercial Bank (NCB) NCB

53、 is an international bank headquartered in Saudi Arabia and engaged in personal, business and private banking, and wealth management (NCB, 2011 ). Another interview was done with Samba Financial Group. Samba is also an international bank headquartered in Saudi Arabia that is engaged in personal and

54、business banking (Samba, 2011). The third company that was interviewed was Savola Holding Company, which is headquartered in Jeddah, Saudi Arabia and is engaged in the food industry. Through subsidiary companies, Savola is engaged in the manufacturing of vegetable oils, dairy products and food retai

55、ling operations both in Saudi Arabia and other international markets. Due to strict confidentiality of the companies interviewed, the names of the people will not be mentioned or their titles. This was the most important condition in order to conduct these interviews.Each of the three companies has

56、been involved in significant mergers. NCBs most significant merger was when it acquired a Turkish bank, Turkiye Finans Katilm Bank in 2008. Sambas most significant merger was its acquisition of Cairo Bank in 1999. Savolas most significant acquisition was its acquisition of Al-Marai in 1 991. NCB has

57、 engaged in four mergers overall and three international mergers. Inaddition to its acquisition of the Turkish bank, it acquired Estate Capital Holdings, The Capital Partnership Group Limited and NCB Capital. The acquisitionoftheTurkish bank was considered its most successful acquisition because it

58、allowed NCB to expand into a new international market with strong growth.While NCB does not consider any of its acquisitions to be a failure, it has recognized losses through goodwill impairment, even in the Turkish bank acquisition. Sambas most prominent M8A has been with Cairo bank of Egypt.Savola

59、 has engaged in about 10 mergers including a few international mergers. It considers its acquisition of Panda (a supermarket chain) in 1998 to be its most successful because it allowed Savola to gain a major presence in the food retailing market and increases revenues significantly. Savola has had a

60、 couple of mergers that it considered to be failures. One such example was when it acquired a real estate company in Jordan. This company was outside Savolas core business and outside its home country. Savolas learning from this failure was not to invest outside its core business in a foreign countr

61、y as there was no ability to create any value through this merger and it was investing in a country that it did not know as well as its home country. Another failed merger occurred when it acquired an edible oil company in Kazakhstan. This merger failed because even though the acquired company had g

62、ood fundamentals, the value creation mechanisms were quite different between the two companies.Strategic motivations for mergers were discussed with the companies and Samba provided details. One motivation is to increase lines of business. Another motivation is to move into a new geographic area. In

63、 many cases when expanding into a new country, it is easier to acquire an existing business than try to start a new one. Another motivation is to increase market share.Particularly in a mature industry, a company can gain market share quickly through an acquisition, while it is usually a slow proces

64、s to gain market share organically in an incremental manner.All the companies tried to achieve company growth and synergy in their mergers.The criteria and selection process for mergers were also discussed with the companies. Savola worked with financial institutions to identify acquisition target c

65、ompanies. Savola looked for companies that were among the leaders in theirrespective markets. Savola believed that companies that were leaders generally had good processes and were well managed, so their operations would be good to acquire. After the failed merger with the real estate company, Savola looked to acquire companies rela