Compare and contrast the following theories of Mergers – Synergy, Hubris and Agency. (Context: Not everyone is convinced that Mergers and Acquisition activity is a good use either of societal resources or acquiring company resources. eg One of the few very firm facts of merger research is that target company shareholders almost always do extremely well from takeover. By contrast, it’s not at all clear that M and A is beneficial for acquiring company shareholders. So what motivates acquiring companies and are there cheaper less risky ways to achieve the same corporate objectives?)
Compare and contrast the following theories of Mergers – Synergy, Hubris and Agency. (Context: Not everyone is convinced that Mergers and Acquisition activity is a good use either of societal resources or acquiring company resources. eg One of the few very firm facts of merger research is that target company shareholders almost always do extremely well from takeover. By contrast, it’s not at all clear that M and A is beneficial for acquiring company shareholders. So what motivates acquiring companies and are there cheaper less risky ways to achieve the same corporate objectives?)
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 7QTD
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- Compare and contrast the following theories of Mergers – Synergy, Hubris and Agency.
(Context: Not everyone is convinced that Mergers and Acquisition activity is a good use either of societal resources or acquiring company resources. eg One of the few very firm facts of merger research is that target company shareholders almost always do extremely well from takeover. By contrast, it’s not at all clear that M and A is beneficial for acquiring company shareholders. So what motivates acquiring companies and are there cheaper less risky ways to achieve the same corporate objectives?)
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