Mergers and Acquisitions Motive

Bachelor Thesis from the year 2013 in the subject Business economics - Business Management, Corporate Governance, Management Center Innsbruck, language: English, abstract: Mergers and acquisitions (M & A) are a form of corporate expansion and growth. They are not the only means of growth for a company, but they are an alternative to growth by internal or organic capital investments. (Sudarsanam,(1995) p. 1) The first decade of the new millennium was an era of global mega-mergers. Several factors like readily available credit, low interest rates, technological change and global competition fueled M & A activity and in 2007, M & A transactions reached a new record dollar volume worldwide. (DePamphilis, (2011) p. 13-14) Mergers and acquisitions are an important means of removing underperforming managers or companies and transferring resources to where they are most needed. (DePamphilis, (2011) p. 124) However, there is considerable evidence that many M & A activities remain unsuccessful. Estimated failure rates are typically between 60 and 80 percent. (Homburg and Bucerius, (2006) p. 347) Due to these high failure rates, it seems unreasonable for a company to engage in an M & A transaction, but still, more and more companies decide to do exactly that. Given the high failure rates of mergers and acquisitions, this topic is one that is of high significance and has been extensively researched in the past. This paper aims to collect the most important research th...