Mergers and Acquisitions (M&A) are some of the dominant topics of the economy today, because such a step has big influence on the companies’ development, the location, the employees and the other stakeholders.
Such activities are seen as an instrument of the development of a company since a long time. Companies act or respond with it on competitive situations.
The market for M&A expels in high volumes year by year therefore the interest of the public is accordingly big.
The shareholders and the management of the individual companies play a very big role on that occasion. They make the decision for or against a merger and they are also the ones who will earn profits from such a union, or suffer also damage in the case of doubt through it.
In order to find a solution of this problem, one needs a structured action and a lot of information.
This work deals intensively with the topic of Mergers & Acquisitions and explains on the basis of two examples the possible development. On this occasion, it was distinguished from takeovers also between two different forms; the friendly merger and the hostile takeover.
An especially big hurdle on the way to the new company represents the restructuring and integration of the acquired business into existing structures. Therefore one aim of this work is to show different possibilities of an after-merger-development; for example with Shareholder-Value-Strategies.
Since this is often interconnected with enormous expenditure and high costs, this study deals with the possible consequences for shareholders and management, not only positive but also negative ones.
Table of Contents
Chapter 1: Introduction
Chapter 2: Literature review
2.1 Basics for M&A
2.1.1 Terminology
2.1.2 Historical review
2.2 Demarcation of internal and external growth
2.3 Demarcation of company co-operations
2.4 Different forms of consolidations
2.5 Chances and risks
2.6 Investor Relations Management as an instrument for a successful perspective for shareholders and management
2.7 Motives for company mergers
2.7.1 Strategic motives
2.7.2 Synergism and efficiency
2.7.3 Building up a strategic market position
2.7.4 Market power
2.7.5 Mergers for know-how
2.7.6 Economic reasons
2.7.7 Subjective reasons
2.7.8 Management
2.7.9 Shareholder
2.8 Methodology
Chapter 3: Findings and Analysis
3.1 Effects of M&A for shareholders and management with a friendly takeover, representation of the example UBS Inc.
3.1.1 Representation of the M&A
3.1.2 Positioning of the UBS after the M&A
3.1.3 Perspectives for the shareholders through an effective Investor Relations Management with UBS
3.1.4 Value-based Management
3.1.5 Communications management as competence for the General Management
3.2 Effects of M&A for shareholders and management with a hostile takeover, representation of the example Sanofi-Aventis Inc.
3.2.1 The hostile takeover bid from Sanofi Inc.
3.2.2 Economical and political reactions on the hostile takeover bid
3.2.3 Perspectives for the shareholders and the management through an effective Investor Relations Management with Sanofi-Aventis
Chapter 4: Conclusions
Research Objectives and Core Themes
This dissertation examines the multifaceted effects of Mergers and Acquisitions (M&A) on both shareholders and management, investigating how these stakeholders are influenced by different consolidation strategies. The study aims to provide a structured understanding of M&A motivations, risks, and the critical role of Investor Relations Management in post-merger integration through a comparative analysis of friendly and hostile takeover examples.
- The impact of M&A activities on corporate development and stakeholder value.
- Strategic, economic, and subjective motives driving corporate mergers.
- The essential function of Investor Relations in maintaining corporate credibility and communication during complex transitions.
- A comparative empirical analysis of a friendly merger (UBS Inc.) and a hostile takeover (Sanofi-Aventis Inc.).
- The importance of post-merger integration and value-based management for long-term corporate success.
Excerpt from the Book
3.1.1 Representation of the M&A
The merger from the Swiss bank company (SBG) and from the Swiss bank club (SBV) to form the UBS Inc. became public in February 1998. Both companies were active in the global sector of the banking and the financial markets. After an examination of the registration of the commission of the European community, it was determined by these that it doesn't give any occasion to serious misgivings regarding the compatibility with the common market and to other EC-rules (EWG, 1998). On December, 5th 1997, the boards of both companies were in favour of the transaction and the merger was announced as planned on December, 8th 1997 (the making of UBS, 2005, p. 13). The UBS Inc. was born.
Regarding the compatibility within the common market, a general business unit was formed with different areas as, investment banking, financial transactions, private banking and banking with nonbanks. The sector of investment banking included the products admittance to the going public of companies, the share and bond emissions as well as the Mergers & Acquisitions advice. The area of financial transactions consisted of share and bond trading, derivative businesses as well as foreign currency trading. The declaring companies SBG and SBV explained with the registration that the only relevant areas of merger were the Mergers & Acquisitions advice, the issue of shares and the stock trading.
Summary of Chapters
Chapter 1: Introduction: Provides an overview of the strategic necessity of M&A for companies in evolving markets and highlights the role of Investor Relations during these transitions.
Chapter 2: Literature review: Defines the basics of M&A, including forms of consolidation, motives, risks, and the framework of Investor Relations Management.
Chapter 3: Findings and Analysis: Empirically examines two case studies, UBS Inc. as a friendly merger and Sanofi-Aventis Inc. as a hostile takeover, to contrast stakeholder outcomes.
Chapter 4: Conclusions: Summarizes key results, noting that while motives are diverse, success heavily relies on integration and transparent communication.
Keywords
Merger, Acquisition, UBS, Sanofi-Aventis, Shareholder-Value, Investor Relations Management, Friendly Takeover, Hostile Takeover, Synergism, Efficiency, Corporate Strategy, Capital Costs, Market Power, Integration, Financial Communication.
Frequently Asked Questions
What is the primary focus of this dissertation?
The work focuses on analyzing the impacts of Mergers and Acquisitions (M&A) on shareholders and management, specifically emphasizing the role of Investor Relations Management in achieving post-merger success.
What are the central thematic areas of the research?
The key themes include M&A motivations (strategic, economic, and subjective), the differentiation between friendly and hostile takeovers, and the effectiveness of communications strategy during company integration.
What is the core objective of the research?
The primary goal is to show the consequences of M&A activities for shareholders and management and to demonstrate how effective Investor Relations can mitigate risks and enhance corporate value during these transitions.
Which scientific methodology does the author apply?
The author utilizes secondary research based on extensive literature review combined with a qualitative case study approach, analyzing UBS Inc. and Sanofi-Aventis Inc. as empirical examples.
What topics are discussed in the main body?
The main body covers the theoretical foundations of M&A (growth types, risks, motives) and presents two detailed empirical case studies exploring the friendly merger of UBS and the hostile takeover of Aventis by Sanofi.
How is this work characterized by keywords?
Key characterizations include M&A terminology, Investor Relations, shareholder value, synergy effects, corporate integration, and specific case examples like UBS and Sanofi-Aventis.
What role did the "white knight" play in the Sanofi-Aventis takeover?
Aventis sought a "white knight" (Novartis) as a tactical element to repulse the unwanted Sanofi bid, which pressured share prices upward and served as a strategic defense mechanism.
How did UBS address its post-merger credibility crisis?
UBS implemented a new strategy by late 1999 that prioritized long-term business goals, increased transparency in financial reporting, and successfully pursued an entry into the New York Stock Exchange (NYSE).
- Quote paper
- Alexander Wolters (Author), 2005, Mergers & Acquisitions: A comparison of the perspectives for shareholders and management, Munich, GRIN Verlag, https://www.grin.com/document/43487
