The Synergy Trap - Mark L. Sirower

The Synergy Trap

(Autor)

Buch | Softcover
304 Seiten
2007
The Free Press (Verlag)
978-1-4165-8465-0 (ISBN)
17,45 inkl. MwSt
With acquisition activity running into the trillions of dollars, it continues to be a favorite for corporate growth strategy, but creating shareholder value remains the most elusive outcome of these corporate strategies—after decades of research and billions of dollars paid in advisory fees, why do these major decisions continue to destroy value?

Building on his groundbreaking research first cited in Business Week, Mark L. Sirower explains how companies often pay too much—and predictably never realize the promises of increased performance and competitiveness—in their quest to acquire other companies. Armed with extensive evidence, Sirower destroys the popular notion that the acquisition premium represents potential value. He provides the first formal and functional definition for synergy -- the specific increases in performance beyond those already expected for companies to achieve independently. Sirower's refreshing nuts-and-bolts analysis of the fundamentals behind acquisition performance cuts sharply through the existing folklore surrounding failed acquisitions, such as lack of "strategic fit" or corporate culture problems, and gives managers the tools to avoid predictable losses in acquisition decisions.

Using several detailed examples of recent major acquisitions and through his masterful integration and extension of techniques from finance and business strategy, Sirower reveals:

-The unique business gamble that acquisitions represent
-The managerial challenges already embedded in current stock prices
-The competitive conditions that must be met and the organizational cornerstones that must be in place for any possibility of synergy
-The precise Required Performance Improvements (RPIs) implicitly embedded in acquisition premiums and the reasons why these RPIs normally dwarf realistic performance gains
-The seductiveness and danger of sophisticated valuation models so often used by advisers

The Synergy Trap is the first exposé of its kind to prove that the tendency of managers to succumb to the "up the ante" philosophy in acquisitions often leads to disastrous ends for their shareholders. Sirower shows that companies must meticulously plan—and account for huge uncertainties—before deciding to enter the acquisition game. To date, Sirower's work is the most comprehensive and rigorous, yet practical, analysis of the drivers of acquisition performance. This definitive book will become required reading for managers, corporate directors, consultants, investors, bankers, and academics involved in the mergers and acquisitions arena.

Mark L. Sirower teaches business strategy and competitive analysis at the Stern School of Business at New York University. He speaks frequently on creating value through mergers and acquisitions for major corporations and in a variety of public forums. The Synergy Trap is based on his pathbreaking Columbia University doctoral thesis. He lives in Manhattan.

Contents

Preface

PART 1. UNCOVERING THE RULES OF THE GAME

1. Introduction: The Acquisition Game

The M&A Phenomenon

Back to First Principles: The Acquisition Game

A Brief History of the Research on Acquisitions

2. Can You Run Harder? Synergy

Synergy and the Acquisition Game

The Performance Requirements of Pre-Acquisition Market Values

The Competitive Challenge of Synergy

The Cornerstones of Synergy

Predictable Overpayment

3. Do You Feel Lucky? The Acquisition Premium

The Synergy Concept: Expectations versus Realizations

The Resource Allocation Decision: An Introduction

Required Performance Improvements: A Simulation Approach

The Seductiveness of Financial Valuation Models

4. Tools and Lessons for the Acquisition Game

Prior Expectations and Additional Resource Requirements

Competitors

Time, Value, and the Premium

PART 2. AN ANALYSIS OF CORPORATE ACQUISITION STRATEGIES

5. Acquirer Performance and Risk Taking

Corporate Acquisitions as a Strategy for Value Creation

Acquisition Premiums

Strategic Relatedness of Acquisitions

Method of Payment

The Performance Effects of Mergers versus Tender Offers

Relative Size of the Acquisition

Managerial Risk Taking Following Acquisition

6. Methodology

Sample

Acquiring Firm Performance

Independent Variables

Changes in Risk Taking Following Acquisition

Empirical Techniques

7. Discussion of Results

Aggregate Results on Acquisitions

Traditional Tests and Replications of Evidence on Relatedness

Testing the Acquiring Firm Performance Model

Tests for Changes in Risk Taking

8. Implications of the Analysis

Theoretical Contributions

Public Policy Implications

Practical Implications

Appendix A: Review and Critique of Prior Research on Mergers and Acquisitions

Appendix B: Detailed Results of the Analysis in Part 2

Appendix C: Sample and Descriptions of Targets and Acquirers

Used in the Analysis

Notes

Bibliography

Index

About the Author

Erscheint lt. Verlag 26.10.2007
Verlagsort New York
Sprache englisch
Maße 152 x 229 mm
Gewicht 376 g
Themenwelt Geisteswissenschaften Philosophie
Technik
Wirtschaft Betriebswirtschaft / Management Unternehmensführung / Management
Wirtschaft Volkswirtschaftslehre Ökonometrie
ISBN-10 1-4165-8465-X / 141658465X
ISBN-13 978-1-4165-8465-0 / 9781416584650
Zustand Neuware
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