Index
Markus Venzin
(Bocconi University, Milan, Italy)
Matteo Vizzaccaro
(SDA Bocconi School of Management, Milan, Italy)
Fabrizio Rutschmann
(Prysmian Group, Milan, Italy)
Making Mergers and Acquisitions Work
ISBN: 978-1-78743-350-2, eISBN: 978-1-78743-349-6
Publication date: 21 June 2018
This content is currently only available as a PDF
Citation
Venzin, M., Vizzaccaro, M. and Rutschmann, F. (2018), "Index", Making Mergers and Acquisitions Work, Emerald Publishing Limited, Leeds, pp. 251-256. https://doi.org/10.1108/978-1-78743-349-620171008
Publisher
:Emerald Publishing Limited
Copyright © 2018 Emerald Publishing Limited
INDEX
Accretion
, 129
Acquirer(s)
, 21, 97, 134–139
characteristics
, 189
domestic
, 59
financial
, 178
Acquisition(s)
, 11, 21
process
, 109, 116
speed
, 148–149
Adaptation–Aggregation–Arbitrage (Triple-A triangle)
, 162
Alliance learning process
, 21
Antitrust authorities
, 26–29
AOL
, 4, 84
Apple
, 12, 46
Asset
“stripping”
, 38–39
valuation
, 19
Awareness gap
, 70, 71, 73
Barilla
, 21
Belgian-Dutch bank Fortis
, 107
“Big conglomerates” model
, 15
Big deals
, 16
BMW
, 4, 106, 107
Boeing Company
, 216–217
“Bootstrap game”
, 128, 129
British Insulated Callender’s Cables (BICC)
, 7, 102
Buy-side transactions
, 68, 69
Chrysler to Cerberus Capital Management
, 85
Cisco
, 12, 21
Coca-Cola Company
, 164
“Contractual growth”
, 67
Corporate-level interventions
, 169
Cost(s)
, 104
cost-based synergies
, 38
Cross-border
acquisitions
, 3
M&As
, 59, 120
strategy
, 164
strategy and organization matrix
, 162, 164–165
Cultural, administrative, geographical, and economical dimensions (CAGE)
, 58, 162
distance
, 61, 62
Cultural/culture
, 87, 178, 191
compatibility
, 87
and cultural differences in M&A
, 10
distances
, 62
diversity
, 62
incompatibility
, 62
insensitivity
, 183
integration
, 183–186
issues
, 151
methodology to understanding
, 108–113
Deal-breakers
, 149–152
Deal-making process
, 119
Dedicated alliance function
, 21
Dedicated divestiture teams
, 71
Dedicated M&A team
, 21–23
Destroy value, M&As
, 9
“Deterioration trap”
, 72
Dilution
, 64, 129
Discounted cash flows analysis (DCF analysis)
, 97
Divestment, method to assessing opportunities for
, 67–79
Douglas Daft
, 164
Draka’s acquisition, case of
, 92
Due diligence
activities
, 62
process
, 89, 95–121
Early warning system
, 71–72
Earnings per share (EPS value)
, 128
eBay
, 4, 190
acquisition of Skype
, 190
in China case
, 117
Emerging markets, due diligence process
, 117–121
Emotions
, 90
recognizing emotions with price tag
, 139–144
seller’s implicit goals and
, 92–94
Employees
, 29, 194, 217
distraction
, 29
from Nextel
, 190
Escrow account
, 153
Evaluation gap
, 73, 74
External advisors
, 23, 63–65
Exxon-Mobil
, 83
Facebook
, 52, 53
Family-owned company
, 18–19
Finance/financial/financing
, 95, 150, 166
advisors
, 24, 25
effectiveness of
, 126
factor
, 130
finance/accounting
, 98
M&A
, 51–58
theory
, 131
Fiscal
due diligence
, 103
factor
, 130
issues
, 95
problems
, 106
Ford
, 39
Friendly takeover
, 16, 131
GE
, 12, 21, 75
Geographic location and proximity of firms
, 15
Geographical distance
, 15, 170
Global deals
by value
, 3, 4, 5–6
by volume
, 3, 4
Global execution
, 218–221
“Globalization Penalty”
, 157
Greenpeace
, 24
Honda
, 106
Horizontal
acquisitions
, 40, 45
integration
, 40
Hostile takeover
, 2, 16, 133, 204
Human capital, access to
, 48, 198
Human resources
, 95, 119, 177
Identity
, 181
confusing culture
, 191–192
corporate
, 208, 222
ignoring
, 191
Implementation gap
, 78
InBev
, 12, 63
InBev–Anheuser Busch deal
, 63
Indication of interest (IOI)
, 97
Industrial assets, access to
, 48
Information technology giant EMC’s acquisition of VMware
, 47
Integration team
, 14, 23
nonexistence
, 11
settlement of dedicated
, 208–209
Intellectual property (IP)
, 48, 197–198
Internal sponsor
, 23
Internalized branding
, 222–223
Intrinsic value
, 124–127
Investment analysis
, 127
Jaguar Land Rover (JLR)
, 39
LBO
, 26
Legal
, 95
advisors
, 26, 27
issues
, 150
legal/regulatory
, 98
Lenovo
, 113, 114, 155
Letter of intent (LOI)
, 95, 97–98
Leverage/leveraging
networks
, 73
ratio
, 146–147
LinkedIn
, 35
Listed company
, 18–19
Managing culture
, 180
Market/marketing
, 14, 82
capitalization
, 2
“concentration doctrine”
, 26
power
, 40–46
“power hypothesis”
, 26
value
, 124–127
The Mattel acquisition of The Learning Company
, 104–105
Merger(s)
, 2, 193–194
global
, 93
timeline of merger integration
, 195
Mergers and acquisitions (M&A)
, 1, 3, 8, 12, 38, 46, 129–130, 157, 217–218
accelerate market access for target’s products
, 46
access skills and technologies faster or at lower cost
, 47–49
archetypes
, 14
buying cheap
, 50–51
causes of deal disappointment or difficulties
, 38
consolidating to removing excess capacity
, 40–46
dedicated M&A team
, 21–23
destroying value
, 9
execution across national borders
, 58–63
financial M&A
, 51–58
“hall of shame”
, 4
improving target company performance through business portfolio optimization
, 38–40
integration strategies
, 196
phases of
, 33–36
playbook
, 13–21
process
, 34, 95
Microsoft
, 35
Mood of bid
, 16
Multinational company (MNC)
, 168
Cross-border Strategy and Organization matrix
, 164–165
Draka
, 159–160, 165–166
integrated arbitrage within transnational firm
, 163–164
international market
, 161–162
multinational firm
, 157–159
Multinational firm
, 158, 163, 170
Multinationalism impact on transactions
, 60
MySpace
, 52, 53
Negotiating factors
, 130
Negotiation
, 123, 139, 151
acquirer
, 134–139
agreement with managers
, 131–134
distinguish between market and intrinsic value
, 124–127
firm protection from contingencies
, 147–148
identify and manage potential deal-breakers
, 149–152
payment alternatives to retrieving maximum value
, 144–147
post-closing risks management
, 152–153
recognizing emotions with price tag
, 139–144
time management and speed of acquisition
, 148–149
valuation art supporting by science
, 127–131
Net present value (NPV)
, 129
News Corp.
, 52, 53
Newsfeed
, 53
Nexans Company
, 42, 133
Nonstrategic assets
, 68
Organic growth
, 8, 38
Ferrero’s strategy
, 9
Organizational
, 95, 98
boundaries
, 62
chart
, 207–209
compatibility
, 84–87
culture
, 71
methodology to understanding organizational structure and processes
, 113–115
model
, 10
resources
, 11
threats
, 74
trade-off
, 67
Overconfidence
, 1, 2
Payment alternatives to retrieving maximum value
, 144–147
Pfizer-Allergan merger
, 32
“Pillage and plundering”
, 38–39
Post-closing risks management
, 152–153
Post-contractual clauses
, 96
Post-merger
disinvestments
, 68
integration plan
, 69
Post-merger integration process
, 155, 157, 197
accelerators of integration
, 200–201
accepting imperfect organizational chart
, 207–209
adequating control mechanisms between HQ and subsidiaries
, 169–174
balancing speed with precision
, 205–207
characteristics of acquirer
, 189
cogency of decisions
, 230
communication
, 211–212, 223–228
creating advantage from multinational presence
, 157–167
cultural integration
, 181–183
earning trust of acquiring entity
, 187–188
engagement of people priority
, 212–214
example of
, 192–193
global execution
, 218–221
headquarters task profile
, 167–169
IP
, 197–198
M&A
, 196, 198–199, 217–218
making people decisions fast
, 201–204
mergers
, 194, 199–200
methodology to setting right integration speed
, 193
methodology to setting right level of integration
, 174–179
Nextel
, 189–190
priority actions in
, 198
protecting existing business
, 209–211
Prysmian Group
, 229
recognizing soft side of integration
, 179–180
requirement for speed
, 204–205
small deals
, 191
stronger branding campaign and internalized
, 222–223
timeline of merger integration
, 195
total absorption
, 188–189
UBS
, 216
Pre-merger integration exercises
, 209
Preservation
, 195–196
Price
, 124, 150
Price tag, recognizing emotions with
, 139–144
Price-earnings ratio (P/E ratio)
, 128
Private equity fund (PE fund)
, 2, 26
Private equity groups (PEGs)
, 26
Private equity providers
, 26
“Private firm discount”
, 19
Privatization
, 17
Procter & Gamble (P&G)
, 161
West Africa with Mobil’s
, 83
“Proliferation trap”
, 72
Prysmian
, 7, 8, 9, 10, 32, 55, 64, 166
acquisition of Draka
, 40–41
blood-stream
, 7
Prysmian–Draka
, 42
Prysmian People Performance (P3)
, 213
Quick wins
, 196
Radical integration
, 196–197
Rationale for divestment
, 67–68
Re-branding
, 214–215
“Relationship capital”
, 91, 132–133
Reputation as acquirer management
, 90, 91
Research and development (R&D)
, 95, 106–107
consolidation
, 137
and engineering teams
, 82
redeployment
, 15
Revenue-based synergies
, 38
“Reverse treatment approach”
, 74
Rover
, 4, 106, 107
Royal Bank of Scotland (RBS)
, 4, 107
Sears-Kmart merger
, 53
State-owned company
, 17
Strategic alliances
, 38, 67, 197
management of
, 21
Strategic factors
, 130
Strategic fit
, 18, 20
importance
, 83
method to assessing
, 81–84
Strategy
, 95
developing ideas for M&A
, 63–65
executing M&A across national borders
, 58–63
M&A
, 38–58
method to assess opportunities for divestment
, 67–79
strategic alternatives before rushing into M&A
, 66–67
strategy-setting phase
, 81–82
Subsidiaries
adequate control mechanisms between HQ and
, 169–174
strategies
, 167
Successful cultural integration
, 188, 218
Suppliers
, 82, 194
Supply chain
, 14, 166
Synergies
buildup period
, 194
Talent retention program establishment
, 209
Target
accelerate market access for target’s products
, 46
company performance improvement
, 38–40
countries by
, 60–61
model
, 178
selection
, 82–94
Tata Motors strategy
, 39
Tax issues
, 151
Technology
, 137, 206
information technology giant EMC’s acquisition
, 47
infrastructure
, 208
leadership
, 37
wealth
, 229
Technology, media, telecommunications (TMT)
, 48
“Third culture”
, 87
Third-party verification
, 76
Time
, 207
management
, 148–149
“Warner”
, 84
Tobin’s Q
, 50
Total returns to shareholders (TRS)
, 16–17
Traditional valuation techniques
, 130–131
Transformation
, 51
Transformational merger
, 217
Transnational firm
, 163
Turkish national
, 184, 219
Turnaround case
, 18
UBS company
, 25, 216–217
UK’s Vodafone acquisition of Mannesmann
, 147
Undifferentiated arbitrage
, 163
Valeant Pharmaceuticals International
, 57
Valuation(s)
, 150
art supporting by science
, 127–131
Value
, 1, 12
destruction
, 11
intrinsic
, 124–127
of M&A transaction
, 12
payment alternatives to retrieving maximum
, 144–147
value-generating strategy
, 35
value-generating transactions
, 127
Vendor due diligence (VDD)
, 99–100
Warren Buffet’s Berkshire Hathaway and 3G
, 86
Weighted average cost of capital (WACC)
, 52
Winning behaviors
, 109